What this calculator does
An EMI is a fixed monthly loan payment. It combines interest on the outstanding balance with principal repayment, so the interest share normally declines over time.
Formula & Mathematical Logic
EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1)
P is the amount borrowed, r is the monthly rate (annual rate ÷ 12 ÷ 100), and n is the number of monthly instalments.
How WealthAura calculates this
We convert the annual rate to a monthly reducing-balance rate (annual rate ÷ 1,200) and tenure to whole monthly instalments (years × 12). If the rate is 0%, principal is divided evenly across the months. The schedule uses the unrounded calculation and adjusts the final principal amount to clear the remaining balance; currency is rounded only when displayed.
Worked example
A ₹10,00,000 loan at 8.5% for 20 years has an estimated EMI of about ₹8,678.
Input sensitivity & what changes
At the same ₹10,00,000 and 8.5% rate, a 10-year tenure produces an EMI of about ₹12,399 and about ₹4.88 lakh interest; 15 years produces about ₹9,847 and ₹7.73 lakh interest; 20 years produces about ₹8,678 and ₹10.83 lakh interest. A lower EMI can therefore mean substantially more interest over time.
How to interpret the result
Read the EMI together with total interest and the amortization schedule. Early instalments normally contain more interest because the balance is highest then.
Key factors that influence the outcome
Rate, tenure, fees, insurance and future rate revisions on a floating-rate loan can change the lender's figure. A prepayment can reduce principal, but its exact effect depends on the lender.
Common calculation mistakes to avoid
Comparing only EMI, using a flat rate as though it were a reducing-balance rate, and ignoring total interest are common errors.
Underlying assumptions & legal caveats
The estimate uses a constant reducing-balance rate and regular monthly payments. It does not include lender-specific charges, moratoriums or changing rates.
Read the related guide →