How the EMI calculator works
Equated Monthly Installment (EMI) is the fixed monthly payment that pays off both principal and interest by the end of the loan tenure. Each EMI has two parts: the interest portion (calculated on the outstanding balance) and the principal portion (reduces the balance). Early in the loan, most of each EMI is interest; by the end, almost all of it is principal.
The calculator uses the standard formula every Indian bank applies:
EMI = P × r × (1 + r)n / ((1 + r)n − 1)
where P is the principal, r is the monthly rate (annual rate ÷ 12 ÷ 100), and n is the number of months. Enter the loan amount, annual rate, and tenure — the EMI and total interest update instantly.
EMI by loan type — typical Indian rates (mid-2026)
| Loan type | Typical rate | Typical tenure |
|---|---|---|
| Home loan | 8.25% – 9.5% | 15–30 years |
| Loan against property | 9.5% – 11% | 10–20 years |
| Car loan (new) | 9% – 11% | 5–7 years |
| Car loan (used) | 11% – 14% | 3–5 years |
| Personal loan | 10% – 18% | 1–5 years |
| Education loan | 9% – 13% | 10–15 years |
| Credit card (avoid!) | 30% – 45% | — |
Tenure trade-off: lower EMI vs total cost
Most home-loan borrowers default to the longest tenure they qualify for (often 25–30 years) because it minimises EMI. The hidden cost is total interest. On a ₹50 lakh loan at 8.5%:
| Tenure | EMI | Total interest | Total paid |
|---|---|---|---|
| 10 years | ₹61,993 | ₹24.4 lakh | ₹74.4 lakh |
| 15 years | ₹49,237 | ₹38.6 lakh | ₹88.6 lakh |
| 20 years | ₹43,391 | ₹54.1 lakh | ₹1.04 crore |
| 30 years | ₹38,446 | ₹88.4 lakh | ₹1.38 crore |
Going from 20 to 30 years saves ₹5k/month in EMI but costs an extra ₹34 lakh in interest. A common middle path: take the 30-year loan for cash-flow flexibility, then prepay aggressively when you can — most lenders allow free prepayment on floating-rate home loans.
EMI and your income tax
Home loan EMIs are tax-advantaged under the old regime:
- Section 24(b) — interest paid is deductible up to ₹2 lakh/year for self-occupied property. For let-out property, the full interest is deductible (subject to a ₹2 lakh annual loss cap when combined with other property income).
- Section 80C — principal repayment is deductible up to ₹1.5 lakh/year, shared with PPF, ELSS, life insurance premiums, and other 80C investments.
- Section 80EE / 80EEA — additional ₹50,000 deduction for first-time homebuyers on smaller loans, subject to specific criteria.
The new regime allows none of these. Use our Income Tax Calculator to see which regime works out cheaper for your situation — for most home-loan-paying salaried people in mid-to-high brackets, the old regime still wins.
How to use the calculator effectively
- Enter the loan amount you\'re considering.
- Use the lender\'s current quoted rate — for home loans, this is usually the External Benchmark Lending Rate + your spread.
- Pick the tenure (years or months — toggle the unit dropdown).
- Compare the EMI to your monthly budget. Banks usually approve up to 50% of net monthly income as EMI, but staying under 35% leaves room for life.
- Scroll the year-by-year table to see how quickly your loan balance shrinks.
Sources
- Reserve Bank of India — current External Benchmark Lending Rate (EBLR) and repo rate that drive floating home-loan pricing.
- Income Tax Act, 1961 — Sections 24(b), 80C, 80EE/80EEA: statutory authority for home-loan interest and principal deductions.
Calculator is provided for estimation only and does not constitute financial advice. Quoted rates and EMI are illustrative; your lender's actual sanction letter is the binding figure.
Related tools
- Income Tax Calculator — see how home loan deductions affect your old-vs-new regime choice.
- HRA Calculator — for the rent-vs-buy question, compute your current HRA exemption first.
- GST Calculator — for businesses calculating loan-related transactions.