Methodology
EMI Calculator Methodology
Equated Monthly Installment for a fixed-rate amortising loan.
By Yadav PatleLast updated:
Formula
EMI = P × r × (1 + r)^n / ((1 + r)^n − 1)
Variables
| Symbol | Name | Description |
|---|---|---|
| EMI | Equated Monthly Installment | Fixed monthly payment for the full tenure. |
| P | Principal | Loan amount. |
| r | Monthly interest rate | Annual rate ÷ 12 ÷ 100. |
| n | Total months | Tenure in years × 12. |
Worked example
₹50,00,000 home loan for 20 years at 8.5% p.a.: r = 0.00708, n = 240, EMI ≈ ₹43,391. Total payable ≈ ₹1,04,13,799 of which ₹54,13,799 is interest.
Assumptions and limitations
Every model leaves something out. Here is what this calculator assumes, and what it does not model, so you can interpret the output honestly:
- Fixed interest rate for the full tenure. Most home loans in India are floating-rate (linked to repo or MCLR) and the EMI / tenure can change at every reset.
- Processing fees, stamp duty, prepayment penalties and insurance premiums are excluded.
- No prepayments or part-payments are modelled. These can shorten tenure significantly.
Authoritative sources
Where the formula, rates, or framework come from:
Try it now
Plug in your own numbers in the EMI Calculator and see the formula applied in real time.
This methodology page is for educational purposes only. Calculations are estimates; real-world results vary with taxes, fees, expense ratios, and market conditions. Yadav Patle is not a SEBI-registered investment adviser. For personalised advice, consult a registered adviser.