Loan Details
Your Results
Monthly EMI
₹0
Loan Amount
₹0
₹0
Total Interest
₹0
Processing Fee
₹0
Total Payment
₹0
Total Cost of Loan
Yearly Amortization Schedule
Principal + Interest per year| Year | Principal Paid | Interest Paid | Total Paid | Remaining Balance |
|---|
How Loan EMI is Calculated
Personal, car, education, business and two-wheeler loans in India are almost always repaid through equated monthly instalments (EMIs) on a reducing balance basis. Each EMI splits into an interest portion (charged on your outstanding balance) and a principal portion.
The EMI formula
EMI = P × r × (1 + r)n / [(1 + r)n − 1]
P is the loan (principal) amount, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the number of monthly instalments.
Why does interest rate depend on loan type?
The formula is identical across loan types — what changes is the interest rate lenders are willing to offer, based on risk:
| Loan type | Typical risk profile | Why |
|---|---|---|
| Personal / Business | Higher rate (10-24% p.a.) | Usually unsecured — no asset backs the loan, so lenders price in more risk. |
| Car / Two-Wheeler | Moderate rate | Secured against the vehicle, which the lender can repossess if you default. |
| Education | Often lower, subsidised rate | Seen as investment-purpose lending, and interest may qualify for tax deduction under Section 80E. |
How to calculate your EMI, step by step
- Select your loan type — Personal, Car, Education, Business or Two-Wheeler — to compare against typical rates for that category.
- Enter the Loan Amount you want to borrow.
- Enter the annual Interest Rate quoted by your lender, and your Loan Tenure in years or months.
- Add the Processing Fee percentage if your lender charges one, so it's included in your Total Cost figure.
- Click Calculate EMI to see your monthly instalment, total interest, total cost, and the yearly amortization schedule below.
What this calculator doesn't include
- GST on the processing fee, loan insurance premiums, and late payment penalties.
- Foreclosure charges — many lenders allow free part-prepayment on floating-rate loans but may charge 2-5% on fixed-rate loans.
- Rate changes over time — it assumes a fixed interest rate for the entire tenure, while some business and personal loans carry floating or reviewable rates.
Frequently Asked Questions
All these loans use the same reducing-balance formula: EMI = P × r × (1 + r)^n / [(1 + r)^n − 1], where P is the loan amount, r is the monthly interest rate, and n is the number of monthly instalments. The loan type doesn't change the formula — it mainly changes what interest rate you're likely to be offered.
Personal and business loans are usually unsecured, meaning there's no asset backing them if you default, so lenders charge a higher rate (often 10-24% p.a.) to offset that risk. Car and education loans are often secured or partly secured, and lenders may also see them as lower-risk purpose loans, so they typically carry lower rates.
A CIBIL score is a 3-digit credit score (300-900) reflecting your repayment history. A score of 750 or above signals lower risk to lenders, which can help you negotiate a lower interest rate and a higher loan amount — directly lowering your EMI for the same loan amount and tenure.
Yes. Under Section 80E of the Income Tax Act, interest paid on an education loan (for higher studies, for yourself, your spouse or children) qualifies for deduction with no upper limit on the amount, for up to 8 years from when repayment starts — the principal portion isn't deductible under this section.
Yes — prepaying reduces your outstanding principal early, which lowers the interest charged on all future EMIs, since interest is calculated on the reducing balance. Many lenders allow free part-prepayment on floating-rate loans, but may charge a 2-5% foreclosure fee on fixed-rate loans, so check your loan terms first.
The processing fee is a one-time charge (often 0.5-2.5% of the loan amount) deducted upfront or added to your loan cost. Total Cost, as shown by this calculator, is the total interest plus the processing fee — the full extra amount you pay beyond the principal you borrowed.
A longer tenure lowers your monthly EMI, which can help affordability, but you pay interest for more months, so the total interest over the loan's life increases. Choose the shortest tenure whose EMI comfortably fits your monthly budget, rather than automatically picking the longest available option.
It doesn't include GST on the processing fee, loan insurance premiums, late payment penalties, or foreclosure charges. It also assumes a fixed interest rate for the entire tenure, while some business and personal loans carry floating or reviewable rates.