EMI calculator
Work out the monthly instalment, total interest and full repayment schedule before you sign a loan.
Repayment schedule
The EMI formula
EMI = P × r × (1 + r)n ÷ ((1 + r)n − 1)
P is the loan amount, r is the monthly interest rate (annual rate ÷ 12 ÷ 100) and n is the number of monthly instalments.
Example: ₹5,00,000 at 12% a year for 3 years. r = 0.01 and n = 36, so the EMI is about ₹16,607. Over three years you pay about ₹5,97,858, of which roughly ₹97,858 is interest.
Flat rate versus reducing balance
This calculator uses the reducing-balance method that banks use: interest is charged only on the amount still outstanding. Some lenders quote a flat rate, charging interest on the full original amount for the whole tenure. A 12% flat rate over 3 years costs about the same as a 21% to 22% reducing rate. Always ask which method a lender uses.
Before borrowing, read small business loans in India and check whether your monthly cash surplus covers the EMI comfortably.
Questions about EMI
Does a longer tenure reduce my cost?
No. A longer tenure lowers each EMI but increases the total interest you pay. Choose the shortest tenure your cash flow can handle.
Why is most of my early EMI interest?
Interest is charged on the outstanding balance, which is highest at the start. As you repay, the interest part shrinks and the principal part grows.
Does prepaying a loan help?
Prepayment reduces the outstanding principal, so you pay less interest overall. Check whether your lender charges a prepayment fee; for many floating-rate loans to individuals there is none.
Is processing fee included in the EMI?
No. Processing fees, insurance and other charges are usually paid separately or deducted from the amount disbursed. Add them to understand the true cost.
Want help choosing a loan?
A lending advisor can explain Mudra, CGTMSE and working capital options for your business.
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