The amount you borrow.
The rate quoted by your lender (reducing balance).
How many years you will repay over.
Quick examples
Borrowing ₹1,00,000 at 11% a year for 3 years.
What each result means
Monthly EMI
What it is: The fixed amount paid every month.
Your value: ₹3,274
Covers interest first, then principal.
Total interest
What it is: Everything paid over the tenure minus the loan amount.
Your value: ₹17,859
The cost of borrowing.
Total amount paid
What it is: EMI × number of months.
Your value: ₹1,17,859
Principal plus interest.
Interest as % of loan
What it is: Total interest divided by the loan amount.
Your value: 17.9%
Longer tenures push this up sharply.
Year-by-year breakdown
| Year | EMIs paid (₹) | Principal repaid (₹) | Interest paid (₹) | Balance at year end (₹) |
|---|---|---|---|---|
| 1 | ₹39,286 | ₹29,757 | ₹9,529 | ₹70,243 |
| 2 | ₹39,286 | ₹33,201 | ₹6,086 | ₹37,042 |
| 3 | ₹39,286 | ₹37,042 | ₹2,244 | ₹0 |
How to read this: each row is one year of EMIs. Early years are mostly interest; the principal share grows every year. The highlighted row is your final year.
What this calculator does
This calculator uses the standard reducing-balance EMI formula that Indian lenders use: interest is charged each month on the balance still owed, and a fixed EMI repays interest first and principal with the rest.
What your result means
The EMI and total interest follow directly from your loan amount, rate and tenure. A longer tenure lowers the EMI but raises the total interest paid. Your lender's actual schedule may differ slightly because of processing fees, rounding or rate resets.
Formula
1. EMI on a reducing-balance loan
Symbols
- P
- Loan amount (₹)
- i
- Monthly rate = annual rate ÷ 12 ÷ 100
- n
- Number of monthly EMIs = years × 12
Why this formula works
The EMI is the fixed payment whose present value, discounted at the monthly rate over n months, equals the loan amount.
Unit check
₹ = ₹ × (pure ratios). ✓
Worked example
P = ₹10,00,000, 9% → i = 0.0075, 10 years → n = 120: EMI = 10,00,000 × 0.0075 × 1.0075¹²⁰ ÷ (1.0075¹²⁰ − 1) ≈ ₹12,668.
Common mistakes
Using the annual rate instead of the monthly rate. Using years instead of months. Comparing a flat rate with a reducing rate.
Working for your numbers
- Monthly rate i = 11 ÷ 1200 = 0.009167
- Months n = 3 × 12 = 36
- (1 + i)ⁿ = 1.388879
- EMI = ₹1,00,000 × 0.009167 × 1.3889 ÷ 0.3889 = ₹3,274
- Total paid = ₹3,274 × 36 = ₹1,17,859
- Total interest = ₹1,17,859 − ₹1,00,000 = ₹17,859
Frequently asked questions
Why is most of my early EMI interest?
Interest is charged on the balance still owed. At the start the balance is largest, so interest takes most of the EMI; as you repay, the principal share grows.
Does prepaying reduce interest?
Yes — a prepayment lowers the balance, so future interest falls. Check your lender's prepayment terms; RBI bars prepayment charges on floating-rate loans to individuals.
Is the rate on this page guaranteed?
No. The rate is your own input. Banks and markets set actual rates, and they can change. This page shows what the numbers give under your assumptions.
When should I talk to a professional instead?
Before a real borrowing or investment decision, check the lender's Key Facts Statement or speak to a qualified adviser. This page is educational and does not consider your full situation.
Symbols and assumptions
- P
- Loan amount (₹)
- r
- Annual interest rate (%)
- i
- Monthly rate, r ÷ 1200
- n
- Number of EMIs
- The rate stays fixed for the whole tenure.
- EMIs are paid on time at the end of every month.
- Processing fees, insurance and GST on fees are not included.
- Figures are in Indian Rupees (₹).
Sources and review
Reviewed 2026-09-29 · Next review 2027-09-29
- Reserve Bank of India — Master Directions & Fair Practices Code for Lenders
- RBI — Key Facts Statement for loans & advances (2024)
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Related Calculators
How it works
A bike loan is repaid in equal monthly instalments on a reducing balance. Each EMI pays the interest due for that month first; whatever is left reduces the outstanding loan.
The formula
EMI = [P × r × (1+r)^n] / [(1+r)^n − 1]- P
- On-road price minus your down payment
- r
- Monthly rate = annual rate ÷ 12 ÷ 100
- n
- Tenure in months
Worked example
₹1,30,000 at 11% for 36 months works out to about ₹4,255 a month.
Pro tips
- A bigger down payment cuts the interest sharply on a short loan.
- Ask for the total amount payable, including processing fee and insurance.
Common mistakes
- Choosing a longer tenure only to lower the EMI.
- Comparing dealers on EMI instead of the interest rate.
Go deeper
Related lessons
Concepts to explore
Related guides
Institutional grade calculations are illustrative and for educational wealth architecture. Results do not constitute investment advice.