What is a Loan Calculator?
A loan calculator helps you understand the true cost of borrowing money. Enter your loan amount, interest rate, and term to see your monthly EMI (Equated Monthly Installment), total interest paid, and a complete breakdown of each payment.
Whether you're planning for a mortgage, car loan, personal loan, or student loan, understanding your payment schedule helps you budget properly and compare different loan offers to find the best deal.
Calculate EMI
Know exactly what you'll pay each month before committing
Total Interest Cost
See how much extra you'll pay beyond the loan amount
Amortization Schedule
Month-by-month breakdown of principal vs. interest
Compare Scenarios
See how different rates and terms affect your costs
Common loan types this calculator works for:
- Mortgage loans — 15 or 30-year home loans, typically 6-8% APR
- Auto loans — 3-7 year terms, rates vary by credit score and vehicle type
- Personal loans — Unsecured loans with higher rates (8-25% APR typical)
- Student loans — Federal loans (5-7%) or private loans (varies widely)
- Business loans — Commercial loans with terms based on business creditworthiness
How is a loan payment (EMI) calculated?
A loan's fixed monthly payment — the EMI (equated monthly installment) — is calculated with the reducing-balance formula below. "EMI" and "monthly payment" mean the same thing.
EMI = P × R × (1+R)N / ((1+R)N − 1)
Every variable, defined:
- P = loan amount (principal).
- R = the monthly interest rate = annual rate ÷ 12 ÷ 100. This must be the monthly rate, not the annual rate.
- N = the number of monthly payments = years × 12.
The two most common mistakes are using the annual rate for R instead of the monthly rate, and entering the term in years instead of months for N. Convert both to a monthly basis first.
How to calculate EMI (worked example)
Take a $20,000 loan at 9% annual interest for 5 years (N = 60 months). First convert the annual rate to a monthly rate: R = 0.09 ÷ 12 = 0.0075.
P = 20,000
R = 0.09 / 12 = 0.0075
N = 5 × 12 = 60
EMI = 20,000 × 0.0075 × (1.0075)⁶⁰ / ((1.0075)⁶⁰ − 1)
EMI ≈ $415.17 per month
Total paid ≈ $24,910
Total interest ≈ $4,910
So the monthly payment is about $415.17, you repay roughly $24,910 in total, and about $4,910 of that is interest.
Sample amortization schedule
Here are the first six months of the $20,000 loan at 9% over 5 years. The payment stays fixed at $415.17, but the split between interest and principal shifts every month.
| Month | Payment | Interest | Principal | Balance |
|---|---|---|---|---|
| 1 | $415.17 | $150.00 | $265.17 | $19,734.83 |
| 2 | $415.17 | $148.01 | $267.16 | $19,467.68 |
| 3 | $415.17 | $146.01 | $269.16 | $19,198.52 |
| 4 | $415.17 | $143.99 | $271.18 | $18,927.34 |
| 5 | $415.17 | $141.96 | $273.21 | $18,654.13 |
| 6 | $415.17 | $139.91 | $275.26 | $18,378.87 |
In month 1, $150 of the $415.17 payment is interest and only $265.17 reduces the balance. By month 6 the interest portion has already dropped to $139.91 and more goes to principal — the core idea behind amortization, and why early extra payments save the most interest.
Reducing-balance vs flat-rate EMI
Reducing balance is the standard EMI method: interest is charged only on the outstanding balance, so the interest portion falls each month as you pay the loan down. Flat rate charges interest on the full original principal for the entire term, which makes the effective rate almost double. Always prefer reducing-balance.
| $500,000 at 3.5% for 10 years | Monthly payment |
|---|---|
| Reducing balance (standard EMI) | ≈ $4,944/mo |
| Flat rate | ≈ $5,625/mo |
Same headline rate, very different cost. A "low" flat rate can be more expensive than a higher reducing-balance rate, so compare the effective (reducing-balance) rate before signing.
APR vs interest rate (why they differ)
The interest rate is the cost of borrowing the principal alone. The APR (annual percentage rate) rolls in most fees — origination charges, points, some closing costs — into a single yearly figure, so it's usually a little higher than the headline rate.
When comparing loan offers, compare APRs, not just interest rates: a loan with a lower rate but high fees can have a higher APR and cost more overall. This differs from APY, which measures compounding on savings — see the compound interest calculator.
EMI per 100,000 borrowed: quick reference
This table shows the monthly payment on every 100,000 (one lakh, or $100k) borrowed, at common rates and terms. To estimate any loan, multiply the value by (your loan amount ÷ 100,000). For a 2,000,000 (20 lakh) loan, multiply by 20; for a $250,000 loan, multiply by 2.5.
| Rate | 5 years | 10 years | 15 years | 20 years |
|---|---|---|---|---|
| 7% | 1,980 | 1,161 | 899 | 775 |
| 8% | 2,028 | 1,213 | 956 | 836 |
| 9% | 2,076 | 1,267 | 1,014 | 900 |
| 10% | 2,125 | 1,322 | 1,075 | 965 |
| 11% | 2,174 | 1,378 | 1,137 | 1,032 |
| 12% | 2,224 | 1,435 | 1,200 | 1,101 |
Monthly payment per 100,000 borrowed, reducing-balance basis, rounded to the nearest unit. Notice how a longer term lowers the monthly payment but stretches interest over more months.
EMI examples for common loan amounts
The most-searched loan sizes, worked out with the reducing-balance formula. Rates and terms are stated for each — your actual EMI depends on the rate you're offered.
What is the EMI for a 20 lakh (₹2,000,000) loan?
At 9% annual interest: about ₹17,995/month over 20 years (total interest ≈ ₹23.2 lakh), or about ₹20,285/month over 15 years (total interest ≈ ₹16.5 lakh). The shorter term costs ~₹2,290 more each month but saves roughly ₹6.7 lakh in interest.
How much is a 7 lakh (₹700,000) EMI per month?
At 10% annual interest over 5 years, the EMI is about ₹14,873/month, with total interest of roughly ₹1.92 lakh over the term.
What is the EMI for a 2 lakh (₹200,000) loan?
At 12% annual interest over 2 years, the EMI is about ₹9,415/month, with total interest of about ₹25,953. (Personal loans in this range often carry 12–24% rates — always check the reducing-balance rate.)
Tip: to estimate any amount, use the "EMI per 100,000" table above and multiply. A 20 lakh loan = the per-lakh figure × 20; a $250,000 loan = the per-$100k figure × 2.5.
How to Get the Best Loan Terms
A small difference in interest rate or loan term can mean thousands of dollars saved. Here's how to optimize your loan:
1. Improve Your Credit Score First
A difference of 100 points can mean 2-3% lower APR. Pay down credit cards, fix errors on your report, and avoid new credit inquiries before applying.
2. Shop Multiple Lenders
Get quotes from at least 3-5 lenders. Banks, credit unions, and online lenders all compete for business. Multiple rate checks within 14-45 days count as one inquiry.
3. Consider Shorter Terms
A 15-year mortgage vs 30-year has higher payments but saves massive interest. On $300k at 7%: 15 years = $143k interest; 30 years = $418k interest. That's $275k difference!
4. Make Extra Payments
Even small extra payments reduce principal faster and cut total interest. Adding $100/month to a $200k mortgage at 7% saves $45k+ and pays off 5 years early.
5. Watch for Hidden Fees
Compare APR (includes fees) not just interest rate. Look for origination fees, prepayment penalties, and closing costs. A lower rate with high fees might cost more overall.
The 28/36 Rule
Keep housing costs under 28% of gross monthly income, and total debt payments under 36%. If you earn $6,000/month, aim for max $1,680 housing cost and $2,160 total debt payments (including credit cards, car loans, etc.).
About Our Loan Calculator
Calculate loan payments and amortization instantly with our free online loan calculator. Whether you're planning a mortgage, auto loan, personal loan, or any other financing, our tool shows your monthly payment, total interest, and complete payment schedule.
With our calculator, you can:
Calculate your monthly EMI payment instantly
See the total interest you'll pay over the loan term
View principal vs interest breakdown for each payment
Get a complete amortization schedule (monthly or yearly)
Visualize balance reduction over time with charts
EMI Formula
EMI (Equated Monthly Installment) is calculated using the following formula:
EMI = P × r × (1 + r)ⁿ / ((1 + r)ⁿ - 1)
Where:
- P = Principal loan amount
- r = Monthly interest rate (annual rate ÷ 12 ÷ 100)
- n = Total number of monthly payments
Loan Calculation Example
For a $100,000 loan at 7% annual interest for 30 years:
P = $100,000
r = 7% ÷ 12 ÷ 100 = 0.00583
n = 30 × 12 = 360 months
EMI = 100,000 × 0.00583 × (1.00583)³⁶⁰ / ((1.00583)³⁶⁰ - 1)
EMI = $665.30 per month
Total Payment = $665.30 × 360 = $239,508
Total Interest = $239,508 - $100,000 = $139,508
Over 30 years, you'll pay $139,508 in interest – more than the original loan amount!
Understanding Amortization
Amortization is the process of spreading loan payments over time. Each payment consists of two parts:
Principal Portion
The part that reduces your loan balance. This increases over time.
Interest Portion
The cost of borrowing, calculated on remaining balance. This decreases over time.
In the early years of a loan, most of your payment goes toward interest. As the balance decreases, more goes toward principal. This is why extra principal payments early in the loan can save significant interest.
Common Loan Types
| Loan Type | Typical Term | Typical Rate |
|---|---|---|
| Mortgage | 15-30 years | 6-8% |
| Auto Loan | 3-7 years | 5-10% |
| Personal Loan | 1-7 years | 8-25% |
| Student Loan | 10-25 years | 4-8% |
| Home Equity | 5-30 years | 7-12% |
Frequently Asked Questions
What is EMI?
EMI stands for Equated Monthly Installment. It's a fixed payment amount made by a borrower to a lender at a specified date each month. EMIs consist of both principal and interest components.
How can I reduce total interest paid?
You can reduce total interest by: (1) choosing a shorter loan term, (2) making extra payments toward principal, (3) refinancing to a lower rate, or (4) making bi-weekly payments instead of monthly.
Should I choose a shorter or longer loan term?
Shorter terms have higher monthly payments but lower total interest. Longer terms have lower monthly payments but cost more overall. Choose based on what you can comfortably afford monthly.
What's the difference between fixed and variable rate loans?
Fixed-rate loans have the same interest rate throughout the term. Variable-rate loans can change based on market conditions. This calculator assumes a fixed rate.
How does making extra payments help?
Extra payments go directly toward reducing principal. This reduces the balance on which interest is calculated, saving you money and shortening your loan term.
Loan Tips
Compare rates: Even a 0.5% difference can save thousands over the loan term
20% rule for mortgages: Put down 20% to avoid private mortgage insurance (PMI)
Pay bi-weekly: Making half-payments every two weeks results in 13 full payments per year
Round up payments: Rounding your payment up to the nearest $50 or $100 reduces your term
Use our loan calculator above to plan your borrowing, compare different loan scenarios, and understand exactly how your payments are applied over time.
EMI questions, answered
What is the formula for EMI?
EMI = P × R × (1+R)N ÷ ((1+R)N − 1), where P is the loan amount, R is the monthly interest rate (annual rate ÷ 12 ÷ 100), and N is the number of monthly payments (years × 12). It's the standard reducing-balance formula used for mortgages, car and personal loans.
How is EMI calculated?
Convert the annual rate to a monthly rate and the term to months, then apply the EMI formula. For a $20,000 loan at 9% over 5 years: R = 0.0075, N = 60, giving an EMI of about $415.17/month, with roughly $4,910 paid in interest over the life of the loan.
What is the EMI for a $20,000 loan?
At 9% annual interest over 5 years, the EMI is about $415.17 per month. You repay roughly $24,910 in total, of which about $4,910 is interest. A shorter term raises the monthly payment but cuts total interest; a longer term does the opposite.
Flat vs reducing balance — which is cheaper?
Reducing-balance is cheaper. It charges interest only on the outstanding balance, which falls every month. A flat rate charges interest on the full original principal for the whole term, making the effective cost almost double a reducing-balance loan at the same headline rate.
Does paying extra reduce interest?
Yes. Any extra payment goes straight to principal, lowering the balance that future interest is charged on. Adding $100/month to a $200,000 mortgage at 7% can save over $45,000 in interest and pay the loan off about 5 years early.
Is EMI good or bad?
Neither — it's just a repayment structure. Fixed EMIs make budgeting predictable and guarantee the loan is cleared by the end of the term. The thing to watch is the total interest cost, which rises sharply with longer terms and higher rates.
What's the difference between APR and interest rate?
The interest rate is the cost of borrowing the principal alone. The APR (annual percentage rate) also includes most fees, so it's usually a little higher and is the better number for comparing the true cost of loan offers.
References & methodology
Monthly payments use the standard reducing-balance EMI equation EMI = P × R × (1+R)ᴺ / ((1+R)ᴺ − 1), with R the monthly rate and N the number of months. For education only — not financial advice.