What is an EMI?
EMI stands for Equated Monthly Instalment — the fixed amount you pay your lender each month until the loan is fully repaid. Every EMI is split between interest and principal. Early on, most of it is interest; as the balance falls, more goes towards principal. The schedule above shows exactly how that split changes each year.
EMI formula
Where P = loan amount, r = monthly interest rate (annual ÷ 12 ÷ 100), n = number of months.
Why prepayment saves money
Any extra amount you pay goes straight to reducing the principal, so future interest is calculated on a smaller balance. Even a small monthly prepayment can cut years off a long loan and save a large amount of interest — turn on "Add monthly prepayment" above to see your own numbers.
Frequently asked questions
Does a longer tenure reduce my EMI?
Yes — a longer tenure lowers the monthly EMI but increases the total interest you pay over the life of the loan.
Is this EMI exact?
It uses the standard reducing-balance formula and is accurate. Your bank's figure may differ slightly due to fees, the disbursal date, or insurance bundled into the loan.
Can I use it for home, car and personal loans?
Yes — the maths is the same for any reducing-balance loan. Just enter that loan's amount, rate and tenure.