About this tool
An EMI is a single number that hides two. Part of every instalment goes to interest, part goes to the principal, and the ratio between them shifts every month: heavily interest at the start, heavily principal at the end. This tool gives you the instalment, and then the number the instalment conceals: what the loan costs in total.
That second figure is the one worth carrying into a negotiation. Two lenders quoting 8.9% and 9.4% on a thirty-lakh, twenty-year home loan differ by about a thousand rupees a month, which sounds survivable. Across the full tenure the gap is over two lakh. Similarly, stretching a tenure always lowers the EMI and always raises the total: the monthly figure improves and the loan gets more expensive at the same time, which is exactly why tenure is the lever a salesman reaches for first.
Enter the reducing-balance rate, not a flat one. Home loans, personal loans and most car loans are quoted on reducing balance, where interest is charged on what you still owe. Two-wheeler and consumer-durable finance is often quoted flat, on the whole original amount for the whole tenure, and the two are not comparable: a flat 10% is roughly a reducing 18%. If the paperwork does not say which one you have, that is worth a phone call before you sign.
The arithmetic runs in your browser. Nothing about your loan, your income or your plans leaves the device.
How to use this tool
- Enter what you are borrowing. The loan amount before any down payment or processing fee. If you are putting down two lakh on a twelve-lakh car, the figure here is ten lakh.
- Enter the rate the lender quoted. The annual reducing-balance rate, which is what banks and housing finance companies advertise. If a lender has given you a flat rate instead, it is not comparable and this will understate your cost.
- Set the tenure. In years or in months, whichever the sanction letter uses. The box takes anything up to forty years.
- Read all four lines, not just the first. The EMI is what leaves your account each month. The total interest is what the loan actually costs you, and it is the number worth comparing between two offers.
What this tool does not do
- It assumes a fixed rate for the whole tenure. Floating-rate loans reprice, and this cannot follow that.
- Processing fees, insurance, stamp duty and GST on charges are not included.
- It does not model prepayment, part-payment or an EMI holiday.
- It does not produce a month-by-month amortisation schedule.
- Nothing here is a quote. Your eligibility and your rate are the lender's to decide.
Common questions
Which formula does this use?
The standard reducing-balance one every Indian lender uses: EMI = P·i·(1+i)^n / ((1+i)^n − 1), where P is the principal, i the monthly rate (the annual rate divided by twelve hundred) and n the number of instalments. Your bank will arrive at the same figure, give or take rounding on the last instalment.
Why is my bank's EMI a few rupees different?
Rounding, and sometimes the day of the month your loan is disbursed. Lenders round the EMI to whole rupees and settle the difference in the final instalment. Some also charge broken-period interest between disbursement and the first due date, which is not part of the EMI at all.
Does this include processing fees and insurance?
No. It calculates the loan, not the deal around it. Processing fees, documentation charges, stamp duty and any insurance a lender bundles in all sit outside the EMI. Add them separately when you compare two offers.
What is a flat rate, and why does it matter?
A flat rate charges interest on the whole original amount for the entire tenure, rather than on the balance that is left. A 10% flat rate is roughly a 17–18% reducing rate. Two-wheeler and consumer-durable loans are often quoted flat, so check which one you have been given before you compare.
Can I model a no-cost EMI offer?
Enter zero as the rate and you get a straight division of the amount by the number of instalments. Worth knowing that most no-cost offers are not free: the interest is usually taken as an upfront discount you forfeit, or added to the price.
How much does a longer tenure really cost?
Run it twice. On a thirty-lakh home loan at 9%, going from twenty years to thirty drops the EMI by about four thousand rupees a month and adds roughly nineteen lakh to the total interest. The monthly figure is what people compare; the total is what they pay.