How EMI Is Calculated

Every loan calculator — including our EMI Calculator — uses the same standard formula:

The formula

EMI = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)

Where:

• P is the principal (the amount you borrow)
• r is the monthly interest rate (annual rate ÷ 12 ÷ 100)
• n is the tenure in months

A worked example

Say you borrow 500,000 at 9.5% per year for 60 months:

• r = 9.5 ÷ 1200 = 0.0079167
• (1 + r)ⁿ = 1.0079167⁶⁰ ≈ 1.6054
• EMI = 500000 × 0.0079167 × 1.6054 ÷ 0.6054 ≈ 10,501

Over 60 months you pay about 630,056 in total — meaning roughly 130,056 of it is interest.

What changes your EMI the most?

1. Tenure — longer tenure lowers the EMI but raises total interest sharply.
2. Rate — even 0.5% matters over long tenures.
3. Principal — EMI scales linearly with the amount borrowed.

Try different combinations in the EMI Calculator or compare against the Loan Calculator which works in years.