How the calculation works
EMI = P × r / (1 − (1 + r)^−n), where r is the annual interest rate divided by 1,200 and n is the number of months. At zero interest, EMI = P / n.
Work through an example
A ₹1,20,000 loan over 12 months at 0% interest requires ₹10,000 each month. Paying an extra ₹2,000 monthly clears it in 10 months. At a positive interest rate, the same principal reduction also reduces future interest.
Assumptions and limitations
This is a fixed-rate, monthly reducing-balance model with payments at the end of each month. Extra payments reduce principal after that month's interest. Processing fees, insurance, taxes, prepayment charges, floating-rate changes, and daily interest are excluded.
The displayed defaults are examples, not live rates. Results are before tax unless explicitly stated. Figures are calculated at full precision, with amounts rounded for display, so adding displayed rows may differ by a small rounding amount.
Questions about this calculator
Does this cover home, car, and personal loans?
It models fixed-rate loans repaid monthly. Actual lenders may use different charges, dates, rounding, or floating-rate rules.
Does a prepayment reduce my EMI?
This model holds the scheduled EMI fixed and shortens the term. A lender may instead offer a reduced EMI; that option is not modelled here.
Keep the comparison useful
Save one calculation before changing an input. Keep the other assumptions fixed, then compare the result with the saved calculation. For borrowing, look at the total interest and repayment time as well as the scheduled payment. For investing, compare contributions with growth and remember that a constant return is only an illustration.
The table provides the numerical checkpoints behind the chart. Download it as CSV if you want to inspect the values elsewhere. A comparison stays in this tab only and is lost when you reload. No account is needed.
Background reading: RBI: EMI and reducing-balance background. Our calculator, worked examples, and explanations are created for SumHatch; the linked organisation does not endorse this tool.
Methodology updated November 10, 2026.