The Equated Monthly Instalment is calculated as:

EMI = P × r × (1 + r)n / [ (1 + r)n − 1 ]

where P is the principal, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the tenure in months.

Although your EMI stays the same each month, its make-up changes. Early on, the outstanding balance is large, so most of the EMI is interest. As you repay, the balance falls and more of each EMI goes to principal. This is reducing-balance interest.

Borrow ₹10 lakh at an assumed 10% for 5 years (60 months): the monthly rate is 0.008333 and the EMI works out to about ₹21,247, with total interest of roughly ₹2.75 lakh. The same loan over 7 years drops the EMI to about ₹16,601 but raises total interest to ₹3.94 lakh. Keep 5 years and raise the rate to 11% instead: the EMI rises only ₹495 a month, yet total interest climbs by about ₹30,000. Tenure stretches cost more than they appear to; rate changes cost more than the EMI shift suggests.

Tenure for total cost, rate for both EMI and cost, and amount proportionally. The first instalment of the ₹10 lakh loan above is about ₹8,333 interest and ₹12,914 principal; by the final year the split has flipped. This generic tool uses one formula for every loan type — for lender-specific context use the Home Loan, Car Loan or Personal Loan pages, and the Loan Prepayment calculator to see what paying extra does.

This calculator models a standard reducing-balance EMI. It does not account for prepayments, rate resets on floating loans, or moratoriums. Use it to compare offers on a consistent basis, then confirm the exact figures with your lender.