EMI Calculator: How Your Loan Repayment Actually Works
Understanding how EMI is calculated helps you negotiate better loan terms. Here's the formula and what affects your monthly payment.
By EpicToolify Editorial
Equated Monthly Instalments (EMI) are fixed monthly payments that repay a loan over a set period. Each payment covers both interest and principal, with the interest portion higher at the start and decreasing over time — this is called amortisation.
The standard EMI formula is: EMI = P × r × (1+r)^n / ((1+r)^n - 1) where P is the principal, r is the monthly interest rate, and n is the number of monthly instalments.
A lower interest rate or longer tenure reduces your monthly EMI but increases total interest paid. Use our EMI calculator to compare scenarios before signing any loan agreement.