Planning a loan? Your EMI (Equated Monthly Instalment) is the monthly amount you’ll pay. This guide explains the formula in simple steps, shows real Indian examples, and gives you a calculator to do it instantly.

What is EMI and why it matters

EMI is the fixed monthly amount you repay on a loan. It helps you compare banks, choose tenure, and keep your budget predictable.

EMI formula (snippet target)

EMI = P × r × (1 + r)^n / ((1 + r)^n − 1)

Where:

• P = Principal (₹)
• r = monthly interest rate (annual ÷ 12)
• n = total months (years × 12)

💡 Quick tip: Annual 8.5% → monthly r = 0.085 / 12 ≈ 0.0070833

Step-by-step: How to calculate EMI by hand

1. Convert annual rate to monthly: r = annual ÷ 12
2. Convert years to months: n = years × 12
3. Plug into the formula and solve powers first
4. Round to nearest rupee

Prefer Excel/Sheets? Use:

=PMT(annual_rate/12, months, -principal)

Example: =PMT(8.5%/12, 240, -3000000)

👉 Try it instantly: Open EMI Calculator

Worked examples (India-style scenarios)

1) Home loan

• P = ₹30,00,000
• Annual rate = 8.5%
• Tenure = 20 years (n = 240 months)
• EMI ≈ ₹26,035
• Total payment ≈ ₹62,48,327
• Total interest ≈ ₹32,48,327

2) Personal loan

• P = ₹5,00,000
• Annual rate = 12%
• Tenure = 5 years (n = 60 months)
• EMI ≈ ₹11,122
• Total payment ≈ ₹6,67,333
• Total interest ≈ ₹1,67,333

3) Car loan

• P = ₹8,00,000
• Annual rate = 9.5%
• Tenure = 7 years (n = 84 months)
• EMI ≈ ₹13,075
• Total payment ≈ ₹10,98,316
• Total interest ≈ ₹2,98,316

(Numbers rounded; use the calculator for exact figures.)

Choosing the right tenure (fast rules)

• Lower EMI = longer tenure → you’ll pay more total interest
• Higher EMI = shorter tenure → less total interest
• Try to keep EMI ≤ 35–40% of your net monthly income

Common mistakes to avoid

• Comparing EMIs without the same tenure/rate assumptions
• Ignoring processing fees and prepayment rules
• Using annual rate directly in formula (must use monthly)

Try these related tool

FAQs

Q1. What is the formula to calculate EMI?
EMI = P × r × (1+r)^n / ((1+r)^n − 1), with monthly r and n in months.

Q2. How do I calculate EMI in Excel?
Use =PMT(annual_rate/12, months, -principal) — the result is your EMI.

Q3. Can I reduce my EMI during the tenure?
Yes, via part-prepayment or by increasing tenure, depending on lender rules.

Q4. Which tenure is best for home loans?
Shorter tenure saves interest; choose the highest EMI you can comfortably afford.

Disclaimer: Educational info only. Check with your lender for final terms.