Loan & EMI Calculator

How It Works

The standard loan payment formula is called the Equated Monthly Instalment (EMI) formula, derived from present-value annuity mathematics.

The formula is: 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 payments (years × 12).

Worked example: You borrow $250,000 at 6.5% per year for 30 years.
r = 6.5 / 12 / 100 = 0.005417
n = 30 × 12 = 360
EMI = 250000 × 0.005417 × (1.005417)^360 / ((1.005417)^360 − 1)
= 250000 × 0.005417 × 6.8485 / (6.8485 − 1)
= 250000 × 0.037091 / 5.8485
≈ $1,580.17 per month

Total payment = $1,580.17 × 360 = $568,861
Total interest = $568,861 − $250,000 = $318,861

Each month, the lender applies your payment first to the accrued interest, then the remainder reduces the principal. In month 1: interest = $250,000 × 0.005417 = $1,354.17, principal repaid = $1,580.17 − $1,354.17 = $226.00, new balance = $249,774.00. As the balance shrinks, each successive payment pays less interest and more principal — this is called amortization.

The amortization table shows exactly this breakdown for all 360 payments, so you can see when you cross the tipping point where more than half of each payment goes to principal (typically around month 253 in this example).

One practical use: plug in your actual mortgage and check how much of your first payment is interest versus equity. Most people are surprised. At 6.5%, your first payment is 86% interest. At 3%, that drops to 62%.

The "interest percentage" result shows what fraction of your total payments will be consumed by interest — a useful single number for comparing loan offers.