How is EMI calculated?
EMI stands for Equated Monthly Instalment — the fixed amount you pay your lender every month until the loan is cleared. Each EMI has two parts: interest on the outstanding balance and a repayment of principal. Early in the loan the interest share is large; as the balance falls, more of every EMI goes towards principal. This is the reducing-balance method that every Indian bank and NBFC uses.
The EMI itself stays the same throughout a fixed-rate loan, which is what makes budgeting predictable.
EMI for ₹10 lakh, ₹20 lakh and ₹50 lakh loans
At 8.5% over 20 years, the EMI scales linearly with the loan amount, so once you know the EMI for ₹10 lakh you can read off the rest. The total interest, though, is nearly as large as the principal itself over a long tenure — which is why the tenure you choose matters as much as the rate.
| ₹10,00,000 | ₹8,678 / mo |
| ₹20,00,000 | ₹17,356 / mo |
| ₹50,00,000 | ₹43,391 / mo |
How tenure changes your total interest
A longer tenure lowers your monthly EMI but raises the total interest you pay, because your money is borrowed for longer. On a ₹10 lakh loan at 8.5%, stretching from 15 years to 25 years cuts the EMI by roughly ₹1,800 a month — but adds several lakh rupees of interest over the life of the loan. Use the tenure slider above to see both numbers move together before you commit.
Fixed vs floating rate EMIs
A fixed-rate loan keeps the same EMI for the whole tenure. A floating-rate loan is linked to an external benchmark (usually the RBI repo rate), so your EMI or your tenure changes when rates move. Most Indian home loans are floating; most car and personal loans are fixed. This calculator assumes a fixed rate — for a floating loan, re-run it whenever your lender resets the rate.
The EMI you can afford vs the EMI you’re offered
Lenders will happily sanction an EMI that eats 50–55% of your monthly income — their risk models stop at “will this person probably repay”, not “will this person also live well”. Your own ceiling should be stricter. A widely used rule keeps all EMIs combined under 40% of take-home pay, and under 30% if your income is variable or a single earner supports the household.
The difference between those two numbers is your life: the 40% borrower absorbs a job change, a medical bill or a rate hike; the 55% borrower refinances in a panic. Before committing, set the EMI here, subtract it from your real in-hand salary, and check that what remains covers rent or maintenance, SIPs, insurance and one unlucky month. The bank approves the loan; only you can approve the lifestyle that comes with it.