Enter the principal, interest rate, and tenure to calculate your Equated Monthly Installment (EMI) on a reducing-balance basis, plus the total interest you will pay.
The standard (reducing-balance) EMI formula is EMI = P × r × (1+r)ⁿ ÷ ((1+r)ⁿ − 1), where r is the monthly rate and n the number of months. Interest is charged only on the outstanding principal, which falls every month.
Watch out for 'flat rate' loans commonly quoted for business and vehicle finance — a 10% flat rate costs roughly the same as an 18% reducing rate, because flat interest is charged on the full principal for the whole tenure. Always ask which basis a quote uses before comparing.
Advanced options let you model a one-time prepayment (with the exact interest saved and months shaved off the tenure) and a lender's processing fee, shown as the one-time cost it actually is rather than hidden inside the EMI.
Because interest is computed on the outstanding balance, which is highest at the start. As principal reduces, the interest share falls and the principal share of each EMI grows — that's why prepaying early saves the most.
Flat rate charges interest on the original principal for the entire tenure; reducing rate charges on the outstanding balance. As a rule of thumb, flat rate ≈ reducing rate ÷ 1.8. A '10% flat' loan is not cheap.
It reduces the monthly EMI but increases total interest paid — often dramatically. Pick the shortest tenure whose EMI your cash flow genuinely supports.
Enter a lump sum and the month it lands in, under Advanced options. Your EMI stays the same, so the loan simply finishes early — the calculator shows exactly how much interest that saves and how many months come off the tenure, compared with paying it off on the original schedule.
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