How a fixed-rate EMI is calculated
Follow a monthly reducing-balance example and distinguish the repayment estimate from the lender’s actual loan terms.
Draft prepared: 2026-10-02. Publisher: GXA Technologies. No named expert review is claimed. AI-assisted draft; human editorial review pending
Put the quantities on the same time basis
Let P be principal, r the monthly decimal rate and n the number of monthly payments. If the entered annual percentage is R, r = R / 1200. A tenure of Y years gives n = 12Y.
Do not enter a monthly rate into the annual-rate field. The same numerical value would then describe a different loan. This explanation is educational and is not personalized financial advice.
The equal-payment relationship
For a positive monthly rate, EMI = P × r × (1+r)^n / ((1+r)^n − 1). Each payment covers that month’s interest on the remaining balance plus some principal. As the balance falls, the interest portion falls under this fixed-rate model.
When the rate is zero, the payment is P / n. That case must be handled separately to avoid division by zero in the interest formula.
Work through a five-year scenario
For P = ₹500,000, R = 10 and Y = 5, use r = 0.10/12 and n = 60. The formula produces approximately ₹10,624 per month. Multiply the unrounded payment by 60 and subtract principal to estimate total interest; displayed rounding can create small differences.
Compare both monthly payment and total interest when changing tenure. Extending the term can improve monthly affordability while increasing the overall interest cost.
What this estimate leaves out
Fees, insurance, taxes, payment-date conventions, prepayments and penalties are not included in this calculator. A floating-rate reset is also outside a single fixed-rate scenario.
RBI guidance discusses the effect of floating-rate changes on instalments and tenure. Read the lender’s actual terms and schedule rather than treating this calculation as a binding quote or regulatory determination.
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