Loan EMI Calculator

Even though the total you pay each month stays flat, the split between interest and principal shifts dramatically over time. In the first year of a long loan, the majority of each instalment services interest on the outstanding balance, and only a small sliver actually reduces what you owe.

As the balance shrinks, less interest accrues each month, so a growing share of the fixed instalment goes toward principal — this is called amortisation, and it's why paying off a loan early saves disproportionately more interest than the number of months remaining would suggest.

Borrow 500,000 at 9% annual interest over 5 years. The monthly rate is 0.75%, and there are 60 months. Plugging those into the formula gives an EMI of roughly 10,379 per month, with total repayment near 622,740 — meaning about 122,740 is interest over the life of the loan.

Shorten the same loan to 3 years instead of 5 and the EMI rises to roughly 15,900 per month, but total interest paid drops to around 72,400 — a reminder that a shorter term almost always costs less overall even though the monthly bite is larger.

Making an occasional lump-sum prepayment doesn't just shave a bit off the balance; it removes future interest that would have compounded on that chunk of principal for every remaining month of the loan. That's why lenders sometimes charge prepayment penalties — early repayment reduces their expected interest income more than the raw principal amount suggests.

This calculator produces an estimate based on the inputs you give it; actual EMIs from a lender may vary slightly due to processing fees, insurance add-ons, rounding conventions or floating rates, so treat the output as planning guidance rather than a binding financial commitment. Nothing here constitutes financial advice, and it's worth confirming final figures directly with your lender before signing paperwork.