What is EMI?

EMI (Equated Monthly Installment) is the fixed payment amount you make to the lender each month to repay your loan. It consists of both principal and interest components.

EMI Calculation Formula

The mathematical formula for EMI is:

EMI = [P x R x (1+R)^N] / [(1+R)^N - 1]

Where:

• P = Principal loan amount
• R = Monthly interest rate (Annual rate ÷ 12 ÷ 100)
• N = Total number of monthly installments

Example Calculation

For a ₹50 Lakh home loan at 8.5% interest for 20 years:

• Principal (P) = ₹50,00,000
• Monthly Rate (R) = 8.5/12/100 = 0.00708
• Tenure (N) = 20 × 12 = 240 months

EMI = ₹43,391 per month

Use our EMI Calculator for instant calculations.

Types of Loans and Their EMIs

Home Loan EMI

• Typical rate: 8-10% p.a.
• Tenure: Up to 30 years
• Calculate Home Loan EMI

Car Loan EMI

• Typical rate: 9-12% p.a.
• Tenure: 3-7 years
• Calculate Car Loan EMI

Personal Loan EMI

• Typical rate: 10-18% p.a.
• Tenure: 1-5 years
• Calculate Personal Loan EMI

Tips to Reduce Your EMI

1. Make a higher down payment - Reduces your loan amount
2. Opt for longer tenure - Lower EMI but more interest
3. Improve your credit score - Get better interest rates
4. Compare multiple lenders - Find the best rate
5. Consider prepayment - Use our Loan Payoff Calculator

Related Calculators

• EMI Calculator
• Home Loan Calculator
• SIP Calculator
• Compound Interest Calculator