EMI (Equated Monthly Installment) is the fixed monthly payment a borrower makes to a lender. It includes both principal repayment and interest charged on the outstanding loan balance.

How is EMI calculated?

EMI = P × r × (1+r)^n / ((1+r)^n – 1), where P is the principal loan amount, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the total number of monthly installments.

Does a higher tenure reduce EMI?

Yes. A longer loan tenure reduces your monthly EMI but increases the total interest paid over the life of the loan. A shorter tenure means higher EMI but lower overall interest cost.

Loan EMI Calculator

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Loan parameters

Loan amount

৳

৳50K৳1 Crore

Annual interest rate

% p.a.

1%30%

Loan tenure

years

1 yr30 yrs

Monthly EMI

—

per month

Total interest

—

of total amount

Total payment

—

over — months

Repayment breakdown

Principal —

Interest —

Year-wise payment split

Principal

Interest

EMI Formula:

EMI = P × r × (1+r)ⁿ / ((1+r)ⁿ – 1)

P = principal | r = monthly rate (annual ÷ 12 ÷ 100) | n = total months

Frequently asked questions

What is an EMI and how is it calculated?

EMI (Equated Monthly Installment) is a fixed payment you make to your lender every month. It consists of a principal portion and an interest portion. The formula is: EMI = P × r × (1+r)ⁿ / ((1+r)ⁿ – 1), where P is the loan amount, r is the monthly interest rate, and n is the number of months.

Does a longer tenure lower my EMI?

Yes — a longer tenure reduces your monthly EMI, making payments more manageable. However, you end up paying more total interest over the life of the loan. A shorter tenure means higher EMI but lower overall cost. Use the calculator above to compare scenarios.

What is an amortization schedule?

An amortization schedule is a month-by-month table showing how each EMI payment is split between principal and interest, and how the outstanding loan balance reduces over time. In the early months, more of your EMI goes toward interest; over time, the principal share increases.

How can I reduce my total interest paid?

You can reduce total interest by: (1) choosing a shorter loan tenure, (2) making part-prepayments when possible, (3) negotiating a lower interest rate, or (4) borrowing a smaller principal amount. A lower interest rate and shorter tenure have the most significant impact.