How is EMI calculated?

EMI is calculated using the formula: EMI = P × r × (1+r)^n / ((1+r)^n − 1), where P is the loan amount, r is the monthly interest rate, and n is the tenure in months.

How can I reduce my total interest paid on a loan?

You can reduce total interest by (1) Making regular prepayments; (2) Choosing a shorter loan tenure; or (3) Transferring your loan balance to a lender offering lower interest rates.

EMI Calculator

Calculate monthly instalments for home loans, car loans, or personal loans.

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Principal + all interest over full tenure

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Total cost of borrowing — minimise this by prepaying

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Formula: EMI = P �— r �— (1+r)ⁿ / ((1+r)ⁿ − 1) where r = monthly rate, n = months. Early EMIs are mostly interest; as time goes on, more goes to principal (amortisation).

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EMI formula

EMI = P �— r �— (1+r)^n / ((1+r)^n − 1), where P is loan amount, r is monthly interest rate (annual rate ÷ 12), and n is total months. This formula spreads principal + total interest equally across all months — early payments are mostly interest, later payments are mostly principal.

Home loan EMI rates — India 2025-26

Home loan rates in 2025: SBI 8.5–9.15%, HDFC 8.7–9.4%, ICICI 8.75–9.1%. On a ₹50 lakh loan at 9% for 20 years, EMI is ₹44,986 and total interest paid is ₹57.97 lakh — more than the original loan. Every ₹1 lakh prepaid in year 1 saves approximately ₹2.2 lakh in total interest.

How to reduce total interest paid

The most powerful strategies: (1) Prepay any surplus each year — even ₹50,000 annually can cut a 20-year loan to 15 years; (2) Choose shorter tenure if EMI is affordable — 15 years instead of 20 saves 28% in total interest; (3) Balance transfer to a lower-rate lender when rates drop by more than 0.5%.