# Loan EMI Calculator

> Work out the monthly instalment, total payable and total interest on a reducing-balance loan.

https://laganisaathi.com/calculators/emi.md

## Formula

Reducing-balance EMI, where interest is charged on the balance outstanding each
month:

```
months = years × 12
r = (annual rate ÷ 100) ÷ 12
EMI = principal × r × (1 + r)^months ÷ ((1 + r)^months − 1)
total interest = EMI × months − principal
```

## Worked example

Rs 10,00,000 at 12% a year over 5 years:

- months = 60
- r = 12 ÷ 100 ÷ 12 = 1% a month
- **Monthly EMI = Rs 22,244.45**
- Total payable = Rs 13,34,666.86
- **Total interest = Rs 3,34,666.86**

## Reducing balance versus flat rate

Early instalments are mostly interest, because the balance falls over time. A
flat-rate loan charges interest on the original principal throughout, so it costs
more for the same headline rate. If a lender quotes a flat rate, this calculator's
output is not directly comparable.

## Related

- [SIP calculator](https://laganisaathi.com/calculators/sip)
- [Share buy and sell cost](https://laganisaathi.com/calculators/share)