EMI Calculator

EMI stands for Equated Monthly Instalment — a fixed monthly payment to repay a loan over a chosen period. Every EMI has two parts: interest (the lender's charge) and principal (reducing the outstanding loan). In India, all scheduled banks use the reducing balance method mandated by the RBI — interest is charged only on the outstanding balance, not the original amount. This means the interest component shrinks slightly every month while the principal component grows — but your total EMI stays fixed. For example, on a ₹30 lakh home loan at 8.5% for 20 years, the EMI is ₹26,035. In Month 1, roughly ₹21,250 is interest; by Month 240, almost the entire EMI is principal repayment.

For fixed-rate loans, yes — the EMI stays exactly the same throughout the tenure, making budgeting straightforward. For floating-rate loans (the majority of Indian home loans), the rate is linked to EBLR — typically the RBI repo rate. When the RBI changes the repo rate, banks must pass it on within 90 days, changing either your EMI or your tenure. After 125 bps of RBI cuts through 2025 (repo rate now at 5.25%), most floating-rate home loan borrowers have seen rates reduce. Check with your bank whether the change reflects on your EMI amount or on the remaining tenure.

This calculator uses the standard reducing-balance formula — EMI = P × r × (1+r)ⁿ ÷ [(1+r)ⁿ − 1] — identical to what all Indian banks use. For a plain loan at a constant rate with no fees, our result will match your bank's calculation to the rupee. Actual bank statements may differ slightly because: (a) processing fees are not included here; (b) some loans carry GST on fees; (c) the first EMI may cover a partial month; (d) floating-rate loans will have future revisions. Use this tool for planning and comparison — confirm the exact figure with your lender before signing.

Yes — this calculator works for any reducing-balance loan: home, car, personal, education, gold, loan against property, or two-wheeler loan. Simply enter the principal, annual rate, and tenure. The formula is universal for all reducing-balance products. It does not work for: (a) flat-rate loans (some vehicle and consumer durable EMI schemes), (b) bullet repayment loans, (c) revolving credit card debt, or (d) step-up/step-down EMI products where the instalment changes over time. For flat-rate loans, the true effective rate is roughly 1.8× the stated flat rate — always ask for the APR equivalent.

Almost always, reducing tenure saves more money. When you reduce tenure, the outstanding balance drops sooner, compounding your interest savings. Reducing EMI instead keeps the same tenure — you pay less each month but for the same number of months, saving considerably less in total interest. Example: on a ₹50L home loan at 8.5% for 20 years with a ₹2L prepayment in Year 2, reducing tenure saves approximately ₹2.8L more than reducing EMI. Exception: if your current EMI is genuinely straining monthly cash flow, reducing EMI is the right call to avoid missed payments. Otherwise, always reduce tenure.

Indian banks use FOIR (Fixed Obligation to Income Ratio) — total monthly EMI obligations should not exceed 40–50% of gross monthly income. A common personal finance guideline is the 30% rule: your home loan EMI alone should not exceed 30% of take-home salary. So ₹1 lakh net/month → ideal home loan EMI is ₹30,000 or below. This calculator shows "Monthly Income Needed" on the result card using the 30% rule. For example, a ₹50L loan at 8.5% for 20 years → EMI of ₹43,391 → requires a take-home of at least ₹1.45 lakh/month. Banks also factor in credit score, existing loans, and employment stability.

As of June 8, 2026, home loan rates from major lenders range from approximately 7.25% to 9.5% per annum for salaried borrowers. The RBI cut the repo rate by a cumulative 125 basis points through 2025, bringing it to 5.25%. Since home loans are now mandatorily linked to EBLR (repo + bank spread), these cuts have been passed on to floating-rate borrowers. Your exact rate depends on CIBIL score, employment type, loan-to-value ratio, and the lender's margin. Always compare the APR — not just the headline rate — across at least three lenders before deciding.

Yes — if your loan is on a floating rate linked to EBLR. Since October 2019, all new floating-rate retail loans from banks must be EBLR-linked. When the RBI changes the repo rate, your bank must pass it on within 90 days. After 125 bps of cuts in 2025, EBLR-linked borrowers would have seen rates drop similarly, reducing either their EMI or remaining tenure. If your loan is still on MCLR (common for loans taken before 2019), rate transmission is slower — cuts take longer to reach you. Ask your bank to switch you to EBLR; a nominal administrative fee typically applies.

In FY 2026–2027 / AY 2027–2028, the new tax regime is the default. Under the new regime, home loan tax benefits are not available. In the old tax regime: (a) Section 24(b) — up to ₹2 lakh/year on interest for a self-occupied property; (b) Section 80C — up to ₹1.5 lakh/year on principal repayment (within the overall 80C limit). For let-out property, there is no Section 24(b) cap in the old regime. Section 80E (education loan interest) is the only home-loan-adjacent deduction available in both regimes. Consult a Chartered Accountant to determine which regime saves you more.

Reducing balance: interest is calculated on the outstanding principal each month — as you repay, the base shrinks and total interest paid is lower. All scheduled bank loans use this method. Flat rate: interest is calculated on the original loan amount for every month, even as you repay. You effectively pay interest on money you've already returned to the bank. Result: a 12% flat rate = roughly 21–22% reducing balance equivalent. Vehicle loan dealers, consumer durable EMI schemes, and some microfinance lenders quote flat rates. Always ask for the reducing balance rate or APR. The RBI requires all regulated lenders to disclose APR.

Missing an EMI has three immediate consequences. First, your bank charges penal interest of 1–3% p.a. (or a flat fee per bounced ECS) as per your loan agreement. Second, the missed payment is reported to CIBIL — a single missed EMI can drop your score by 50–100 points, making future credit more expensive. Third, after 3 consecutive missed EMIs, the account becomes an NPA (Non-Performing Asset) and the lender can initiate recovery under the SARFAESI Act 2002 — which can ultimately lead to property auction for home loans. If you anticipate difficulty, contact your lender immediately — most banks offer restructuring or moratorium options, which are far less damaging than missed payments.

Open the Yearly Table in the Amortization Schedule section. For each financial year, note the Interest Paid and Principal Paid columns. In the old tax regime: the Interest Paid figure is what you can claim under Section 24(b) (up to ₹2 lakh for self-occupied property), and Principal Paid is eligible under Section 80C (₹1.5 lakh combined limit). For FY 2026–2027, use the row for the current financial year. Note that Section 24(b) is not available in the new tax regime (default from AY 2027–2028). The Monthly Table is useful for reconciling individual EMI receipts with your bank statement.

MCLR (Marginal Cost of Funds-based Lending Rate) is an internal rate each bank sets based on its own cost of funds. Rate changes are passed on only at your loan's reset date (every 6 or 12 months), causing significant lag. EBLR (External Benchmark Lending Rate) is linked to the RBI repo rate; banks must pass on changes within 90 days. EBLR is better in a falling rate environment — after 125 bps of cuts in 2025, EBLR borrowers benefited faster. In a rising rate cycle, EBLR loans get more expensive sooner too. Since October 2019, all new floating-rate retail loans must be EBLR-linked. If you're on MCLR, request a switch — a nominal fee applies.

Prepayment is generally neutral to positive for your CIBIL score. A partial prepayment reduces outstanding balance without closing the account — seen positively by credit bureaus. Full foreclosure marks the account "Closed — Satisfied," with no negative impact. A closed loan with a clean repayment record remains on your CIBIL report for 7 years and continues contributing positively. Important: always get a No Dues Certificate (NOC) and verify that the lender updates CIBIL within 30–45 days after closure. Delays in updating are common — follow up and check your CIBIL report 60 days after foreclosure.

It depends on the lender and loan type. For floating-rate personal loans, RBI guidelines prohibit prepayment penalties. But most Indian personal loans are fixed-rate — for these, banks can charge a foreclosure penalty of 2–5% of outstanding principal, usually restricted to the first 12–24 months. After this lock-in period, many lenders allow free prepayment. Some fintech/digital lenders now offer zero-penalty prepayment as a feature — check the loan agreement before signing. The math: a 3% prepayment penalty on ₹5 lakh = ₹15,000. If you save ₹50,000+ in interest by closing early, it still makes financial sense to prepay.