Personal loan EMI calculator

How the EMI is worked out

An EMI is a fixed monthly payment that covers both interest and part of the principal. Early on, most of each instalment is interest; later, most of it is principal. The standard formula is:

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

where P is the amount borrowed, n is the number of months, and r is the monthly rate — the annual rate divided by twelve, then by a hundred.

Flat rate is not the same as APR

This is the single most expensive misunderstanding in Indian consumer lending. A flat rate charges interest on the whole original amount for the entire tenure, even though you are paying the principal down every month. A reducing-balance rate, which is what an APR describes, charges interest only on what you still owe.

The rough conversion: a flat rate is close to half the equivalent reducing-balance rate over a two-year term. So a “12% flat” loan is roughly a 21.5% APR — on ₹1,00,000 over 24 months that is about ₹5,163 a month, not the ₹4,707 a 12% APR would give you.

Always ask for the APR, and always ask for the total repayment figure in rupees. A lender regulated by the Reserve Bank of India has to give you a Key Facts Statement setting both out before you sign.

What this calculator does not know

• Your actual rate. That is set by the lender after they assess you.
• Insurance or other add-ons some lenders bundle in — check the Key Facts Statement.
• Prepayment or foreclosure charges, which matter if you plan to clear the loan early.
• Late-payment penalties.

To see rates you would actually be offered rather than ones you have typed in, run the two-minute check.