Loan Calculator
Calculate your monthly EMI and see the true cost of your loan including total interest.
Twenty Lakh Rupees
Nine Percent
Twenty years
Monthly EMI
₹17,995
Fixed Monthly Payment
Total Interest Payable
₹23,18,685
115.93% of Loan Amount
Breakdown
Payment Summary
Amortization Schedule (First 5 Years)
Optional: want an expert to review your numbers? Leave your email and we'll reach out. Downloads above are free — no email needed.
Loan Deep Dive
How an EMI is actually computed
Every reducing-balance loan uses the same formula: EMI = P × r × (1+r)ⁿ ÷ ((1+r)ⁿ − 1), where P is the principal, r the monthly rate (annual ÷ 12), and n the number of months. The EMI is engineered to stay constant while its internal split shifts every month: interest is charged on the outstanding balance, the remainder reduces principal, next month's interest is computed on the smaller balance, and so on. Early payments are interest-heavy — on a 20-year loan at 9%, about 70% of the first year's payments is pure interest — and the split only crosses 50/50 around year 11.
This is why total interest shocks people: it isn't the rate that hurts, it's the rate multiplied by time on a slowly-shrinking balance.
A worked example — rate vs tenure
₹25 lakh at 9% for 20 years: EMI ₹22,493, total interest ₹28.98 lakh — more interest than principal. Change one variable at a time. Rate to 8.5%: EMI ₹21,696, interest ₹27.07 lakh (saves ₹1.9 lakh). Tenure to 15 years: EMI ₹25,357, interest ₹20.64 lakh (saves ₹8.3 lakh). Tenure to 25 years: EMI ₹20,980 — just ₹1,500/ month lighter than the 20-year EMI, but total interest balloons to ₹37.9 lakh. The asymmetry is the lesson: tenure moves total interest far more than rate, and stretching tenure to make the EMI "comfortable" is the most expensive comfort on sale.
Dollar version: $30,000 car loan at 7%: 4 years costs $4,480 in interest; 7 years costs $8,010 — nearly double, for a payment that's only $270 lower.
Reading a loan offer like a lender
The advertised rate is one line of a longer bill. Processing fees (0.5–2%), insurance bundled "for approval", prepayment penalties on fixed-rate loans, and MCLR/repo-linked reset clauses on floating loans all change the true cost. Two offers at the same rate can differ by tens of thousands once fees are annualized — the honest comparison metric is total cost over your expected holding period, which this calculator's amortization table makes visible. For floating-rate loans, also check the reset frequency: a loan that reprices quarterly passes rate cuts to you faster than one repricing annually.
Common mistakes
- Optimizing the EMI instead of total cost. The lowest EMI is usually the most expensive loan — it just hides the cost in the tail years.
- Flat-rate confusion. A "10% flat" loan charges interest on the original principal throughout — equivalent to ~17.5% reducing-balance. Always convert before comparing.
- Ignoring prepayment rights. Floating-rate home loans in India prepay free; using that right for even one extra EMI a year shortens a 20-year loan by ~3 years.
- Borrowing the full approval. The bank's ceiling is its risk limit, not your budget — EMIs above ~35% of take-home crowd out savings entirely.
Related tools
The mortgage calculator adds taxes and insurance for home purchases, the debt payoff calculator models prepayment strategies on this same amortization engine, the payoff-vs-invest tool answers whether spare cash should attack the loan at all, and the loan arbitrage simulator handles the advanced case of borrowing against investments.
How This Calculator Works
Understanding the Equated Monthly Installment (EMI) formula and amortization.
The calculator uses the standard reducing balance method formula used by all banks to determine your fixed monthly payment.
- P Principal: Loan Amount
- R Rate: Monthly Interest Rate (Annual Rate/12/100)
- N Tenure: Number of months (Years x 12)
Scenario: ₹20,00,000 Home Loan at 7% for 20 Years.
R = 7/12/100 = 0.00583
N = 20 * 12 = 240
EMI = ₹15,506
Total Payment: ₹15,506 × 240 = ₹37,21,439
Total Interest: ₹17,21,439 (almost equal to the loan amount!)
Scenario: ₹5,00,000 Personal Loan at 12% for 5 Years.
R = 12/12/100 = 0.01
N = 5 * 12 = 60
EMI = ₹11,122
Insight: Higher interest rates and shorter tenures mean higher EMIs but significantly less total interest paid compared to home loans.
Smart Borrowing Strategies
Master your loans with these expert tips for Indian borrowers.
Home Loan Strategy
Opt for a 'MaxSaver' or 'Overdraft' home loan account. Parking your surplus savings here reduces the principal balance and interest burden while keeping your money liquid.
Prepayment Power
Prepay 5% of your loan balance every year. This simple habit can erase 5-8 years from a 20-year loan tenure and save you lakhs in interest payments.
Loan Eligibility
Maintain a CIBIL score of 750+. Keep your FOIR (Fixed Obligation to Income Ratio) under 50%. A co-applicant (spouse) can boost your eligibility and offer tax benefits.
Negotiate Rates
Interest rates aren't set in stone. If you have a high credit score, negotiate with your bank for a lower spread. Even a 0.5% reduction makes a massive difference over 20 years.
Personal Loans
These are high-interest (11-20%) unsecured loans. Use them only for emergencies or debt consolidation. Avoid using them for lifestyle expenses or investing.
Auto Loan Wisdom
Car loans depreciate while you pay interest. Try to pay a larger down payment (30-40%) and keep the tenure short (3-5 years) to avoid owing more than the car is worth.
The Golden Rule of Borrowing
Don't borrow just because you can.
- Good Debt: Creates an asset or income (Home Loan, Education Loan).
- Bad Debt: Consumed immediately or depreciates (Vacation Loan, Credit Card Debt).
- Always prioritize clearing Bad Debt first.
Frequently Asked Questions
Common questions and helpful answers about this calculator.