EMI calculator: methodology
The standard reducing-balance EMI formula we use, how the repayment schedule is built, and how rounding is handled so principal adds up exactly.
Last reviewed: Reviewed by: ClearRupee Editorial Team
Formula
With loan amount P, annual rate R% and n monthly instalments:
r = R ÷ 12 ÷ 100
EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1) (r > 0)
EMI = P ÷ n (r = 0)
Repayment schedule
For each month:
interest = opening balance × r
principal = EMI − interest
closing = opening balance − principal
The last instalment repays whatever balance is left, so the principal parts always add up to exactly P. This matches the illustrative repayment schedule in Annex C of RBI's KFS circular.
Rounding
We calculate in full precision and round to the nearest rupee only when displaying results. Lenders usually round the EMI itself, so your actual EMI and the last instalment may differ from ours by a few rupees.
Limitations
- Fixed rate for the whole tenure; floating rates change the EMI or the tenure.
- EMIs start one month after disbursal. A different first due date adds or removes some interest (broken-period interest).
- Fees, GST and insurance are not included. Use the true cost checker for those.