EMI Calculator India 2026

EMI is calculated using the reducing-balance formula: 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. This is the standard method used by Indian banks and NBFCs.

Interest is calculated on the outstanding loan balance. Since the balance is highest at the start, the interest portion of your EMI is highest early on and decreases over time as principal is paid down, even though the EMI itself stays constant.

A fixed rate stays the same for the entire tenure, giving a predictable EMI but often at a slightly higher starting rate. A floating rate moves with the lender's benchmark rate (linked to the RBI repo rate) — it can be lower initially but your EMI or tenure can change if rates rise.

You generally can't change the EMI directly under the original agreement, but you can prepay to reduce the outstanding balance and shorten the tenure while the EMI stays the same, or refinance with a different lender on different terms.

As a rule of thumb, prepay if your loan's interest rate is higher than the returns you'd reasonably expect from investing, and invest if the reverse is true. Also factor in prepayment penalties (if any) and any tax benefits tied to the loan, such as those on home loan interest.