Enter a loan amount, interest rate and term to see your monthly payment, the total interest you’ll pay and a month-by-month repayment schedule. It works for home, car and personal loans.
Show the repayment schedule
| Month | Payment | Principal | Interest | Balance |
|---|
How the EMI is calculated
EMI stands for equated monthly installment: the same payment every month, where each payment covers that month’s interest and pays down part of the loan. The calculator uses the standard formula banks use:
EMI = P × r × (1 + r)^n / ((1 + r)^n − 1)P is the loan amount, r is the monthly interest rate (the yearly rate divided by 12, then by 100) and n is the number of monthly payments. With the example above, 25,000 at 7.5% over 5 years comes to 500.95 a month and 5,056.92 in interest.
Early payments are mostly interest. Open the schedule and look at month 1 against month 60: the interest part shrinks every month while the principal part grows, even though the payment stays the same.
Same calculation in Excel
Excel’s PMT function gives the same number. With the loan amount in B1, the yearly rate in B2 and the term in years in B3:
=PMT(B2/12, B3*12, -B1)The minus sign in front of B1 makes the result positive. Leave it out and Excel shows the payment as a negative number, because it treats money you pay out as negative.
Ways to pay less interest
- Pick the shortest term you can afford. On the example loan, 3 years instead of 5 costs about 777.66 a month but saves roughly 2,060 in interest.
- Make extra payments early, when most of each payment is going to interest.
- Compare rates before signing. Half a percent sounds small, but on a 20-year home loan it adds up to thousands.
Frequently asked questions
Does this calculator work for car and home loans?
Yes. Any loan with a fixed rate and equal monthly payments uses the same formula. For a variable-rate loan the result is only accurate until the rate changes.
Why is my bank’s EMI slightly different?
Banks sometimes add processing fees or insurance to the loan, or round the payment differently. Add those fees to the loan amount to get closer to their figure.