Loan details
EMI = P × r × (1+r)n / ((1+r)n − 1), where r is the monthly rate and n the number of months.
Your repayment
Year-by-year schedule
| Year | Principal paid | Interest paid | Balance |
|---|
What is an Equated Monthly Installment (EMI)?
An Equated Monthly Installment (EMI) is a fixed payment amount made by a borrower to a lender at a specified date each calendar month. EMIs are used to pay off both the interest and principal of a loan over a set number of years. Common examples include mortgages, auto loans, and personal student loans.
How is an EMI Calculated?
The mathematical formula to calculate an EMI is complex. It involves the principal loan amount, the monthly interest rate, and the total number of monthly payments. Our free EMI Calculator handles this complex amortization math instantly, giving you an exact breakdown of your monthly obligations.
Understanding the Amortization Schedule
When you first start paying your EMI, a large portion of your monthly payment goes entirely toward the interest, and only a tiny fraction reduces the principal loan amount. This process is called amortization.
- Early Years: Interest-heavy payments. The bank secures its profit early.
- Middle Years: A balanced split between interest and principal reduction.
- Final Years: Principal-heavy payments, with very little interest remaining since the outstanding loan balance is low.
By making extra payments early in the loan’s lifecycle, you can drastically reduce the total interest you pay over decades, saving you thousands of dollars.