How is EMI calculated for Indian loans?

EMI is calculated using the formula: EMI = [P × R × (1+R)^N] / [(1+R)^N - 1], where P is principal, R is monthly interest rate (annual rate/12/100), and N is number of monthly installments. Our calculator uses this standard formula used by all Indian banks including SBI, HDFC, ICICI, and Axis Bank. This formula ensures equal monthly payments throughout the loan tenure, with early payments being mostly interest and later payments being mostly principal.

What factors affect my EMI?

EMI depends on three factors: Loan amount (higher principal = higher EMI), Interest rate (higher rate = higher EMI), and Loan tenure (longer tenure = lower EMI but more total interest). Prepayments reduce remaining principal and can lower future EMIs or shorten loan tenure. Your credit score, income, loan type (home, personal, car), and lender policies also affect the interest rate you receive, which directly impacts EMI.

Can I save on interest by prepaying my loan?

Yes! Prepayments reduce the principal balance, which lowers total interest. For example, prepaying ₹1 lakh on a ₹25 lakh home loan at 8.5% can save approximately ₹2.1 lakh in interest and reduce tenure by 8-10 months. Use our calculator to see prepayment impact. Most Indian banks allow partial prepayments (usually minimum ₹25,000-₹50,000) without penalties. Some banks charge prepayment charges (typically 2-4% of prepaid amount) for floating rate loans, so check your loan agreement.

What is the ideal EMI-to-income ratio for Indian loans?

Most Indian banks follow the 40-50% EMI-to-income ratio guideline. Your total EMI (including all loans) should not exceed 40-50% of your gross monthly income. For example, if your monthly income is ₹1 lakh, total EMIs should be under ₹40,000-₹50,000. This ensures you have enough income for living expenses, savings, and emergencies. Banks also consider your age, existing liabilities, credit score, and job stability when determining loan eligibility and EMI limits.

What are the tax benefits on home loans in India?

Home loans offer significant tax benefits under the Income Tax Act: Section 24(b) allows deduction of up to ₹2 lakh on home loan interest for self-occupied property (unlimited for let-out property). Section 80C allows deduction of up to ₹1.5 lakh on principal repayment. Section 80EE provides additional ₹50,000 interest deduction for first-time home buyers (loan up to ₹35 lakh, property value up to ₹50 lakh). Section 80EEA offers ₹1.5 lakh additional interest deduction for affordable housing. These deductions can significantly reduce your tax liability.

Should I choose floating or fixed interest rate for my loan?

Floating rates (MCLR-based) are usually 0.5-1% lower than fixed rates initially but can change with market conditions. Fixed rates remain constant but are higher. Choose floating if: you expect rates to decrease, you can handle rate fluctuations, or you plan to prepay early. Choose fixed if: you want payment stability, you expect rates to rise, or you prefer predictable budgeting. Many banks offer hybrid options (fixed for initial years, then floating). Consider your risk tolerance and financial situation when choosing.

How does loan tenure affect total interest paid?

Longer tenure means lower EMI but significantly more total interest. For example, ₹25 lakh at 8.5%: 15-year tenure = ₹24,543 EMI, ₹19.2 lakh total interest. 20-year tenure = ₹21,698 EMI, ₹27.1 lakh total interest. 30-year tenure = ₹19,204 EMI, ₹44.1 lakh total interest. While longer tenure reduces monthly burden, you pay almost double the interest. Choose tenure based on: your monthly budget, long-term financial goals, prepayment plans, and retirement timeline. Shorter tenure builds equity faster and saves substantial interest.

🇮🇳

Loan EMI Calculator India

Calculate monthly EMI for home loans, personal loans, car loans in India (₹ INR). Get amortization schedule, prepayment insights, tax benefits under Section 80C & 24, and compare SBI, HDFC, ICICI, Axis Bank rates.

Popular

💰

Loan EMI Calculator for India

Calculate accurate EMI for home loans, personal loans, car loans. Get amortization schedule, prepayment insights, and save lakhs in interest with smart planning

Loan Details

Enter your loan details to calculate monthly EMI

Loan Amount (₹)*

Principal loan amount you want to borrow

Interest Rate (% per annum)*

Annual interest rate offered by the bank

Loan Tenure*

Duration of the loan

💡 Prepayment Calculator (Optional)

Prepayment Amount (₹)

One-time prepayment amount

Prepayment After Month

Month number for prepayment

Your Monthly EMI

₹17,356

for 240 months

🏦

Loan Amount

₹2,000,000

📈

Total Interest

₹2,165,552

💵

Total Payment

₹4,165,552

📊 Payment Breakdown

48.0%

52.0%

₹2,000,000

Principal (48.0%)

₹2,165,552

Interest (52.0%)

🏦 Current Interest Rates - Major Indian Banks (2025)

Reference rates as of January 2025. Actual rates may vary based on credit score, loan amount, and individual profile. Contact banks for exact rates.

Bank	Home Loan	Personal Loan	Car Loan
SBI	8.50-9.65%	10.30-15.00%	8.70-9.70%
HDFC Bank	8.60-9.50%	10.50-24.00%	8.75-9.80%
ICICI Bank	8.75-9.55%	10.75-19.00%	8.80-10.00%
Axis Bank	8.75-9.65%	10.49-22.00%	8.90-10.25%
Kotak Mahindra	8.70-9.40%	10.99-19.99%	8.85-10.50%
PNB	8.40-10.25%	10.40-17.00%	8.65-11.65%

Understanding EMI: Complete Guide for Indian Borrowers

What is EMI and How Does It Work?

EMI (Equated Monthly Installment) is a fixed payment amount made by a borrower to a lender at a specified date each calendar month. In India, EMI is the most popular method for repaying loans including home loans, car loans, personal loans, and education loans. The EMI consists of both principal amount and interest component.

Indian banks use the reducing balance method where interest is calculated on the outstanding principal balance. This means with each EMI payment, as the principal reduces, the interest component decreases and the principal component increases. This is why in the initial years, you pay more interest and less principal, but towards the end, most of your EMI goes toward principal repayment.

EMI Calculation Formula Explained

EMI = [P × r × (1 + r)^n] / [(1 + r)^n - 1]

Where:
P = Principal loan amount (₹)
r = Monthly interest rate (Annual rate ÷ 12 ÷ 100)
n = Loan tenure in months

Example:

Loan Amount: ₹20,00,000 | Interest Rate: 8.5% p.a. | Tenure: 20 years (240 months)
Monthly rate (r) = 8.5 ÷ 12 ÷ 100 = 0.007083
EMI = [20,00,000 × 0.007083 × (1.007083)^240] / [(1.007083)^240 - 1]
EMI = ₹17,356

Types of Loans in India

🏠

Home Loan

Rate: 8.5-9.5% | Tenure: 5-30 years

Tax Benefits: Tax benefits under Section 80C (principal) & Section 24 (interest up to ₹2 lakh)

Features: Longest tenure, lowest rates, highest loan amount (80-90% LTV), tax benefits

💳

Personal Loan

Rate: 10.5-24% | Tenure: 1-5 years

Tax Benefits: No collateral required, quick disbursal (24-48 hours)

Features: Unsecured, higher rates, flexible usage, no documentation for pre-approved loans

🚗

Car Loan

Rate: 8.7-11% | Tenure: 1-7 years

Tax Benefits: Up to 90% on-road price financing

Features: Secured by vehicle, moderate rates, quick approval, no tax benefits for salaried

🎓

Education Loan

Rate: 8.5-15% | Tenure: 5-15 years

Tax Benefits: Tax deduction on interest under Section 80E (8 years), moratorium period

Features: Covers tuition + living costs, repayment starts after course + 1 year, parental co-obligation

Smart EMI Management Strategies

💰

Make Regular Prepayments

Even ₹50,000-1 lakh annual prepayment can save lakhs in interest. Make prepayments in April-May each year when you get bonus/increment. Most banks allow 5-25% prepayment without charges.

📊

Step-Up EMI Option

Start with lower EMI and increase by 5-10% annually as your income grows. Banks like HDFC, ICICI offer this. You pay less initially when income is lower and more later when you earn more.

🔄

Balance Transfer

Transfer loan to bank offering 0.25-0.50% lower rate. Even small rate reduction saves significantly. Check processing fees and balance tenure before transferring. Best done in first 5-7 years of loan.

⚖️

EMI vs SIP Balance

Don't put all surplus into prepayment. Maintain 50-50 split between prepayment and equity SIP. If loan rate is 8.5%, and you can earn 12-15% in equity over long term, investing makes sense.

📈

Monitor Credit Score

Maintain 750+ CIBIL score for best rates. Pay all EMIs on time, keep credit utilization <30%, avoid multiple loan applications. Good score can get you 0.25-1% rate reduction.

💡

Claim Tax Benefits

Home loan: ₹1.5L principal (80C) + ₹2L interest (24) = ₹3.5L deduction. Saves ~₹1L tax annually for 30% bracket. Don't miss tax benefits—they improve effective cost significantly.

🎯

Choose Right Tenure

Longer tenure = lower EMI but higher total interest. Shorter tenure = higher EMI but saves lakhs in interest. Best: Choose longer tenure for flexibility, prepay aggressively to effectively reduce tenure.

📱

Use EMI Calculators

Use calculators before taking loan to understand total cost. Compare different scenarios. Small changes in rate/tenure/prepayment can have massive impact on total interest paid.

💸 Home Loan Tax Benefits in India (2025)

Section 80C

₹1,50,000

Deduction on principal repayment

Combined limit with PPF, ELSS, Life Insurance, etc. Available from year of possession.

💰 Tax Saving: ₹46,500 (30% bracket)

Section 24(b)

₹2,00,000

Deduction on interest paid (self-occupied)

Full interest deduction during construction. After possession, max ₹2L per year.

💰 Tax Saving: ₹62,000 (30% bracket)

Section 80EEA

₹1,50,000

Additional interest deduction for first-time buyers

Property value ≤₹45L, loan sanctioned Apr 2019-Mar 2022, stamp duty value ≤₹45L

💰 Tax Saving: ₹46,500 (30% bracket)

Let-Out Property

Unlimited

Full interest deduction (no ₹2L cap)

Rent property after taking loan. Entire interest is deductible from rental income.

💰 Tax Saving: Varies based on interest

Maximum Annual Tax Saving: ₹3,50,000 deduction (₹1.5L + ₹2L) = ~₹1,08,500 tax saved for 30% bracket. This effectively reduces your home loan interest rate by 1-2%.

⚠️

Important Financial Disclaimer

This EMI calculator provides estimates for educational purposes only and should not be considered financial advice. Actual EMI amounts may vary based on bank policies, processing fees, GST, insurance, and other charges. Interest rates are subject to change and vary based on credit score, loan amount, property value, and individual profile. Tax benefits are subject to prevailing tax laws and individual circumstances—consult a chartered accountant or tax advisor. Loan eligibility depends on multiple factors including income, age, employment stability, existing liabilities, and credit history. Always read loan agreement terms carefully, compare offers from multiple lenders, and consult qualified financial advisors before making borrowing decisions. We do not guarantee loan approvals or specific interest rates. This calculator is not affiliated with any bank or financial institution.

📊 Home Loan EMI Comparison

EMI for Different Loan Amounts (20 Years @ 8.5%)

Loan Amount	Monthly EMI	Total Interest	Total Payment	Interest %
₹10 L	₹8,685	₹10.84 L	₹20.84 L	108%
₹25 L	₹21,714	₹27.11 L	₹52.11 L	108%
₹50 L	₹43,427	₹54.22 L	₹1.04 Cr	108%
₹75 L	₹65,141	₹81.34 L	₹1.56 Cr	108%
₹1 Cr	₹86,855	₹1.08 Cr	₹2.08 Cr	108%

💡 Interest Rate Impact

For ₹50 Lakh Loan (20 Years):

Interest Rate	Monthly EMI	Total Interest	Difference from 8.5%
8.00%	₹41,822	₹50.37 L	Save ₹3.85 L
8.25%	₹42,619	₹52.29 L	Save ₹1.93 L
8.50%	₹43,427	₹54.22 L	Baseline
8.75%	₹44,247	₹56.19 L	Extra ₹1.97 L
9.00%	₹45,079	₹58.19 L	Extra ₹3.97 L
9.50%	₹46,768	₹62.24 L	Extra ₹8.02 L

💡

Key Insight:

Just 0.5% rate reduction saves ₹1.93 lakhs! Always negotiate for lower rates.

Frequently Asked Questions

What is EMI and how is it calculated in India?+

What is the difference between reducing balance and flat rate interest?+

How can I reduce my EMI burden in India?+

What is a good EMI to income ratio for Indian borrowers?+

Should I choose longer tenure with lower EMI or shorter tenure with higher EMI?+

How much tax benefit can I get on home loans in India?+

What happens if I miss an EMI payment in India?+

Should I prepay my loan or invest the surplus amount?+

What documents do I need for a loan in India?+

How does my CIBIL score affect my loan interest rate in India?+

Calculate your monthly EMI (Equated Monthly Installment) for home loans, personal loans, and car loans in India using our free EMI calculator. Get instant results with detailed breakdowns showing principal, interest, and total payable amount. Perfect for comparing loan offers from SBI, HDFC, ICICI, Axis Bank, and other Indian lenders before making borrowing decisions.

✅ Common Use Cases

Compare EMI options for different loan amounts and interest rates
Determine loan affordability based on your monthly income
Calculate prepayment impact on total interest and loan tenure
Plan home purchases with accurate monthly payment estimates

💡 Key Benefits

Shows complete amortization schedule year-by-year
Prepayment calculator reveals interest savings
Tax benefit calculations for home loans (Section 24, 80C)
Multi-currency support for NRI loans

How to Use Loan EMI Calculator India

1️⃣

Choose your calculator

Navigate to the Loan EMI Calculator India page and familiarize yourself with the input fields.

2️⃣

Enter your values

Input your data into the calculator fields. All inputs are validated in real-time.

3️⃣

View instant results

The calculator instantly displays comprehensive results with detailed breakdowns.

🔬 How Loan EMI Calculator India Works

📐 Formula

EMI = [P × r × (1+r)^n] / [(1+r)^n - 1]

EMI (Equated Monthly Installment) Formula: This is the standard formula used by Indian banks to calculate EMI. P is the principal loan amount, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the number of monthly installments. This formula ensures equal monthly payments throughout the loan tenure.

Variables:

EMI: Equated Monthly Installment
P: Principal loan amount (in ₹)
r: Monthly interest rate (annual rate ÷ 12 ÷ 100)
n: Total number of monthly installments

📋 Step-by-Step Calculation Process

Enter Loan Amount

Input the principal amount you want to borrow. This is the total loan amount before interest. Common loan amounts range from ₹1 lakh to ₹5 crores depending on loan type.

Set Interest Rate

Enter the annual interest rate offered by your lender. Home loan rates typically range from 8-10%, personal loans 10-24%, and car loans 7-12%. Rates vary by credit score and lender.

Choose Loan Tenure

Select the repayment period in years or months. Longer tenures mean lower EMIs but higher total interest. Shorter tenures mean higher EMIs but less total interest paid.

Calculate EMI

The calculator uses the standard EMI formula to compute your monthly payment. It also calculates total interest payable and shows the complete amortization schedule.

Analyze Results

Review your EMI amount, total interest cost, and see how principal and interest are distributed over the loan term. Use this to compare different loan offers and plan your finances.

⌨️ Understanding Input Fields

Loan AmountRupees (₹)

The principal amount you want to borrow

💡 Tip:Enter the exact loan amount you're applying for. Don't include processing fees or other charges in this amount.

Interest RatePercentage (%)

Annual interest rate on the loan

💡 Tip:Enter the rate as a percentage (e.g., 8.5 for 8.5%). Rates vary by loan type, credit score, and lender. Shop around for the best rate.

TenureYears or Months

Loan repayment period

💡 Tip:Home loans: typically 15-30 years. Personal loans: 1-5 years. Car loans: 3-7 years. Longer tenure = lower EMI but more interest.

Prepayment (Optional)Rupees (₹)

One-time prepayment amount

💡 Tip:If you plan to make a prepayment, enter the amount and month. This shows how prepayment reduces total interest and loan tenure.

📊 Understanding Your Results

EMI results show your monthly payment obligation and the complete cost breakdown of your loan. Understanding these numbers helps you plan your monthly budget, compare loan offers, and make informed borrowing decisions.

Key Metrics Explained:

Monthly EMI: Your fixed monthly payment that includes both principal and interest. This amount stays constant throughout the loan term (unless interest rates change for floating rate loans). EMI should ideally be 30-40% of your monthly income.
Total Interest Payable: The total amount of interest you'll pay over the entire loan tenure. This is often substantial—on a ₹50 lakh home loan at 8.5% for 20 years, you'll pay approximately ₹54 lakh in interest alone. Compare this across different loan offers.
Total Amount Payable: The sum of principal and total interest. This shows the true cost of borrowing. For example, a ₹50 lakh loan might cost ₹1.04 crores total. Use this to evaluate if the loan is affordable long-term.
Principal vs Interest Ratio: Shows what percentage of your total payment goes to principal vs interest. Early payments are mostly interest; later payments are mostly principal. This helps you understand loan amortization.

What to Do Next:

Ensure EMI is affordable—should not exceed 40% of your monthly income
Compare EMI across different lenders to find the best rate and terms
Consider prepayment options to reduce total interest and shorten loan tenure
Review the amortization schedule to understand payment breakdown over time
Factor in tax benefits (Section 24, 80C) for home loans when evaluating total cost

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Loan EMI Calculator for India

Loan Details

💡 Prepayment Calculator (Optional)

📊 Payment Breakdown

🏦 Current Interest Rates - Major Indian Banks (2025)

Understanding EMI: Complete Guide for Indian Borrowers

What is EMI and How Does It Work?

EMI Calculation Formula Explained

Types of Loans in India

Smart EMI Management Strategies

💸 Home Loan Tax Benefits in India (2025)

Important Financial Disclaimer

📊 Home Loan EMI Comparison

EMI for Different Loan Amounts (20 Years @ 8.5%)

💡 Interest Rate Impact

Frequently Asked Questions

✅ Common Use Cases

💡 Key Benefits

How to Use Loan EMI Calculator India

Choose your calculator

Enter your values

View instant results

🔬 How Loan EMI Calculator India Works

📐 Formula

Variables:

📋 Step-by-Step Calculation Process

Enter Loan Amount

Set Interest Rate

Choose Loan Tenure

Calculate EMI

Analyze Results

⌨️ Understanding Input Fields

📊 Understanding Your Results

Key Metrics Explained:

What to Do Next:

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