Calculate EMI: To calculate EMI, use EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1), where P is the loan, r the monthly rate and n the number of months.
An EMI (equated monthly instalment) is the fixed amount you pay each month on a loan. Knowing how it is calculated helps you compare offers before you borrow.
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The EMI formula
EMI = P × r × (1 + r)n ÷ ((1 + r)n − 1)
- P = loan amount
- r = monthly interest rate (annual rate ÷ 12 ÷ 100)
- n = number of monthly payments
Worked example
Loan of 100,000 at 10% a year for 5 years: r = 0.10 ÷ 12 = 0.008333 and n = 60.
- Monthly EMI ≈ 2,124.70
- Total payment ≈ 127,482
- Total interest ≈ 27,482
Check your own numbers with our free loan EMI calculator.
How rate and length change the cost
- A longer loan lowers the monthly payment but usually raises total interest.
- A higher rate raises both the EMI and the total cost.
- Paying extra when you can shortens the loan and saves interest.
Before you sign
- Ask for the full cost, including processing fees and insurance.
- Compare the yearly cost of at least three lenders.
- Make sure the EMI fits comfortably inside your monthly budget.
Working with percentages? See how to calculate percentage.
Calculate EMI: frequently asked questions
Is EMI the same as interest?
No. Each EMI contains part principal and part interest.
What if the rate is 0%?
Divide the loan by the number of months.
Will my bank’s figure match?
It should be very close. Fees and rounding can cause small differences.
