Loan EMI Calculator

Created by Arunangshu DasReviewed Nov 14, 2026

Calculate the monthly EMI, total interest and final payment of a reducing-balance loan.

Enter the amount borrowed, the annual rate and the term in months. Fees and taxes are not included.

Monthly payment and cost of the loan

Enter the loan terms or load the worked example.

The annual rate is a nominal rate charged at one twelfth each month on the balance still owed, with payments at the end of each month. Interest is rounded to 0.01 each month and the last payment clears what remains. A lender's own rounding, day count, fees and first-payment date can change these figures.

Learn how an EMI is worked out

Follow the formula, the interest and principal split and the effect of rounding.

Read the loan EMI guide

Formula and methodology

EMI = P × r ÷ (1 − (1 + r)^−n), with r = annual rate ÷ 12 ÷ 100.

Divide the annual rate by 12 to get the monthly rate. The mathematical payment is the loan amount times the monthly rate, divided by one minus (1 + monthly rate) raised to minus the number of months. At a zero rate it is the loan amount divided by the number of months. The calculator then finds the smallest payment in steps of 0.01 whose month-by-month ledger clears the loan within the term, and reports the last payment separately.

Definitions

An EMI, or equated monthly instalment, is a level monthly payment that repays a loan with interest over a fixed number of months. On a reducing balance, each month's interest is charged only on the amount still owed. The payment first covers that interest and the rest reduces the balance, so the interest share falls and the principal share rises with every payment.

Verified worked examples

Borrow 100,000 at 12% a year for 12 months. The monthly rate is 1%. The mathematical payment is 8,884.878868, so the payment is 8,884.88. In month 1 interest is 1,000.00 and 7,884.88 reduces the balance to 92,115.12. After 6 payments 51,492.09 is still owed. The twelfth payment is 8,884.85, which clears the remaining balance and its interest. Total interest is 6,618.53 and all payments add up to 106,618.53.

Interpretation

The payment is what leaves your account each month. Total interest is the cost of borrowing under these terms, before any fees. The first-payment split shows how much of an early payment is interest. The equivalent effective annual rate shows what a monthly-charged rate amounts to over a year: 12% charged monthly is 12.6825%.

Inputs and interpretation

Enter the amount borrowed, not the price of what you are buying. Enter the annual rate your lender applies to the reducing balance, and the term as a whole number of months: 5 years is 60. Choose a market for number formatting only.

Assumptions and limitations

A fixed nominal annual rate charged at one twelfth each month, equal model months, payments at the end of each month starting one month after the loan is drawn, and no fees, taxes, insurance, prepayments, missed payments or rate changes. Interest is rounded half up to 0.01 each month.

Supported domain and common mistakes

Loan amounts above 0 up to 1 trillion with at most 2 decimal places, annual rates from 0% to 100% with up to 12 decimal places, and terms from 1 to 600 whole months. For a very small loan the 0.01 payment step can clear the balance in fewer payments than entered, and the calculator says so.

Do not enter a flat rate as if it were a reducing-balance rate: a flat rate charges interest on the original amount for the whole term and costs far more at the same percentage. Do not multiply the unrounded payment by the number of months to get the total; the last payment differs. Do not enter the term in years.

Frequently asked questions

How is EMI calculated?

Take the annual rate divided by 12 as the monthly rate r, the loan amount P and the number of months n. EMI = P × r ÷ (1 − (1 + r)^−n), which is the same as P × r × (1 + r)^n ÷ ((1 + r)^n − 1). At a zero rate it is P ÷ n.

Why is the final payment different from the others?

A payment is made in whole hundredths, so each one overpays the mathematical amount by a fraction of 0.01, and monthly interest is rounded too. The last payment is whatever balance and interest remain, so it is usually a little smaller.

Is the rate I enter an APR?

It is the annual interest rate applied to the balance, divided by 12 each month. An APR or comparison rate also reflects fees and follows rules that differ by country. The calculator includes no fees, so its figures are not an APR disclosure.

Why is the effective annual rate higher than the rate I entered?

Interest charged monthly compounds within the year. A 12% annual rate charged at 1% a month is equivalent to 12.6825% charged once a year. The payment itself is worked out from the monthly rate.

Does this work for a flat-rate loan?

No. A flat-rate loan charges interest on the original amount for the whole term, whatever has been repaid. This calculator charges interest only on the balance still owed. The same percentage produces a much higher cost on a flat basis.

Can I use it for a Canadian fixed-rate mortgage?

Not directly. Canadian fixed-rate mortgage rates are usually quoted with semi-annual compounding, which gives a slightly lower monthly rate than dividing by 12. This calculator always divides the annual rate by 12.

Sources and educational scope

Educational arithmetic for a fixed-rate, level-payment loan. It is not a loan offer, a lender's schedule, an APR or comparison-rate disclosure, or financial advice. A lender's rounding, day count, fees and payment dates will differ; rely on the loan agreement and its repayment schedule.

Reviewed 2026-11-14. AI-assisted content under operator editorial responsibility. No independent expert financial review is claimed.