Loan EMI Calculator
Calculate monthly payment and totals for a fixed-rate loan.
EMI Formula
P = loan amount · r = monthly interest rate (annual ÷ 12) · n = total months
Example: A $20,000 personal loan at 8% per year for 3 years (36 months). Monthly rate r = 8% ÷ 12 = 0.667%. EMI = $626.73/month. Total paid = $22,562. Interest = $2,562.
How loan repayment works
Every EMI payment contains two parts: interest (the lender's charge for lending the money) and principal (the amount reducing your outstanding loan balance). In the early months, most of the payment is interest. As the balance falls, more goes toward principal.
This is called amortization. On a $250,000 mortgage at 6.5% over 30 years, the first payment of $1,580 includes roughly $1,354 in interest and only $226 in principal. By year 25, those proportions flip — most of each payment reduces your balance.
Making extra payments directly targets the principal, shrinking the loan faster. Even an extra $100/month on a $200,000, 30-year loan at 6% saves over $26,000 in interest and pays off the loan 4 years early.
Common loan terms at a glance
| Loan type | Typical term | Typical rate |
|---|---|---|
| Home mortgage | 15 – 30 years | 6 – 8% |
| Auto loan | 3 – 7 years | 5 – 10% |
| Personal loan | 1 – 7 years | 7 – 20% |
| Student loan (federal) | 10 – 25 years | 5 – 8% |
| Business loan | 1 – 10 years | 6 – 15% |
Rates are approximate and vary by credit score, lender, and market conditions.
Frequently Asked Questions
EMI (Equated Monthly Installment) is the fixed monthly payment you make to repay a loan. It includes both principal and interest repayment. The proportion of interest vs principal shifts over time — early payments are mostly interest.