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Monthly EMI
Buying a home?
Home-loan interest can reduce your taxable income under the old regime. Compare the New vs Old tax regime and see your tax with our free calculator.
Open the ITR Calculator → Try the SIP CalculatorWhat is an EMI?
An Equated Monthly Instalment (EMI) is the fixed amount you pay your lender every month until a loan is fully repaid. Each EMI covers part interest and part principal. Early in the loan, most of the EMI goes toward interest; over time, a larger share pays down the principal.
How this EMI calculator works
Enter the loan amount, the annual interest rate and the tenure in years. The calculator uses the standard reducing-balance formula that banks apply to home, car and personal loans, then shows your monthly EMI along with the total interest and total amount you will pay over the life of the loan.
The EMI formula explained
Lenders calculate EMIs on a reducing-balance basis using the formula EMI = P × r × (1+r)n ÷ ((1+r)n − 1), where P is the principal, r is the monthly interest rate (annual rate ÷ 12 ÷ 100) and n is the number of monthly instalments. Because the outstanding principal falls with every payment, the interest portion of each EMI shrinks over time while the principal portion grows. In the early years most of your EMI is interest — which is why prepaying early saves the most.
How tenure and rate change your cost
Two loans of the same amount can cost very different totals depending on tenure and rate:
- Longer tenure = lower EMI, higher total interest. Stretching a loan reduces the monthly strain but you pay interest for more years.
- Shorter tenure = higher EMI, much lower total interest. If you can afford the instalment, a shorter term saves a large amount.
- Even a 0.5% rate difference on a long home loan can change the total interest by lakhs — always compare lenders' effective rates, not just the headline.
Prepayment and foreclosure
Making part-prepayments — for example, directing an annual bonus toward the loan — reduces the outstanding principal, so more of every future EMI goes toward clearing the loan and you save on interest. On floating-rate home loans, the RBI does not allow prepayment or foreclosure penalties for individual borrowers, so prepaying is usually a smart move. Fixed-rate loans and some personal loans may carry a small foreclosure charge, so check your agreement first.
Tax benefits on a home loan
If the EMI is for a home loan, you may claim deductions under the old tax regime: up to ₹2 lakh a year on the interest under Section 24(b) for a self-occupied house, and up to ₹1.5 lakh on the principal under Section 80C. These benefits are largely unavailable under the new regime, so factor them in when you compare the two regimes. Car and personal loans for personal use generally carry no tax benefit.
Frequently asked questions
Does a longer tenure reduce my EMI?
Yes — a longer tenure lowers the monthly EMI, but you pay much more total interest over the life of the loan. A shorter tenure means a higher EMI but far less interest.
Is the interest rate fixed or floating here?
The calculator assumes a constant rate for the whole tenure. If your loan has a floating rate, your actual EMI or tenure may change when the rate is revised.
Is my data stored?
No. Everything is computed in your browser — no figures are sent to or stored on any server.
Does prepaying my loan really save money?
Yes. A part-prepayment reduces the outstanding principal, so a larger share of every future EMI clears the loan instead of paying interest. Prepaying early in the tenure — when the interest portion is highest — saves the most. Floating-rate home loans for individuals carry no prepayment penalty.
Can I claim tax benefits on my EMI?
On a home loan under the old regime you can claim up to ₹2 lakh a year on interest (Section 24b) and up to ₹1.5 lakh on principal (Section 80C). Most of these benefits do not apply under the new regime, and personal or car loans for personal use generally have no tax benefit.