How is a loan EMI calculated?
EMI (Equated Monthly Instalment) is the fixed amount you pay each month until a loan is fully repaid. It's calculated with this formula:
- EMI = P × r × (1+r)ⁿ ÷ ((1+r)ⁿ − 1)
where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the number of monthly payments (years × 12).
Why total interest matters
A longer term lowers your monthly payment but increases the total interest you pay. Try dragging the term slider — you'll see the monthly payment fall while total interest rises. Paying a little extra each month can save a large amount over the life of the loan.
What's the difference between interest rate and APR?
The interest rate is the cost of borrowing the principal. APR also includes certain fees, so it's usually slightly higher and better for comparing loans.
Does this include fees or insurance?
No — this shows principal and interest only. Add any arrangement fees or insurance separately.