An EMI (Equated Monthly Instalment) is the fixed amount you pay every month toward a loan. It combines both principal and interest so the loan is fully repaid by the end of the tenure.
The EMI formula
EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1), where P is the principal, r is the monthly interest rate and n is the number of months.
Worked example
For a ₹10,00,000 loan at 9.5% for 20 years, the EMI is roughly ₹9,321 and total interest about ₹12,37,146.
Tips to reduce your EMI
- Make a larger down payment.
- Choose a longer tenure (lower EMI, more interest).
- Prepay whenever you can.
Try it yourself with our EMI Calculator.