EMI Calculator — with Prepayment Simulator & Current Bank Rates
✓ Formula: RBI-standard reducing balanceUpdated 23 July 2026Bank rates verified for July 2026
Calculate your monthly loan installment for any home, car, personal or education loan. This calculator uses the same reducing-balance formula every RBI-regulated bank in India uses. It also does something most EMI calculators don't: shows you how much you save with regular prepayments, and how your CIBIL score alone can change your total interest cost by lakhs.
The EMI your bank quotes is not the EMI you'll actually pay
Every loan officer opens the same way: "Sir, your EMI will be ₹34,713 per month." That number is not wrong. It is also not complete. The real monthly cost of a home loan sits noticeably higher than the sanction-letter EMI, and understanding why is the difference between a comfortable repayment and a stretched budget.
Start with pre-EMI interest. For an under-construction property, the bank disburses the loan in stages as the builder hits milestones. You pay interest — only interest, no principal — on each disbursed tranche until the full loan is out. On a ₹40 lakh loan disbursed over 24 months, that is roughly ₹5-6 lakh of pre-EMI interest you pay before your main EMI clock even starts.
Add the CIBIL rate spread. A borrower with a 780 CIBIL score gets 8.35%. A borrower with a 720 CIBIL score gets 9.25%. That 0.9% is worth ₹2,300 more per month and ₹5.5 lakh more over the tenure — on the exact same loan. Your credit score is a hidden line item on your EMI.
Add the processing fee (typically 0.5% of the loan, plus 18% GST) and the bundled insurance some banks push (often ₹40,000-₹80,000 on a home loan, silently added to the principal). Now the "₹34,713 per month" quote has actually cost you an extra ₹1.2-1.5 lakh you never saw in the calculator.
What this page does differently: the calculator below is honest about the formula, but the sections beneath it — the CIBIL rate table, the prepayment simulator, the reducing-balance vs flat-rate comparison, the worked examples for three real loan sizes — show you what actually determines the total cost of borrowing, not just the monthly number. Read them before you sign anything.
₹40,00,000
8.5%
20 yrs
Monthly EMI
₹34,713
Principal borrowed
₹40,00,000
Total interest paid
₹43,31,120
Total repayment
₹83,31,120
Interest as % of total
52.0%
Principal 48.0%Interest 52.0%
AmortizationSee month-by-month →
Period
EMI paid
Principal
Interest
Balance
Prepayment simulator: what if you paid extra?
Enter how much you can prepay per year, and see how many years and how many rupees you save. Uses the same principal and rate as the calculator above.
₹1,00,000
Year 1
With this prepayment plan
Your ₹40,00,000 loan at 8.5% for 20 years becomes:
Loan closed in
13.1 yrs
Years saved
6.9 yrs
Interest saved
₹16,95,000
Why this works: Every rupee of prepayment goes straight to the principal, so all the future interest that would have been calculated on that rupee — every month, for the remaining tenure — disappears. On a 20-year loan, that saved interest can be 2-4× the prepaid amount.
Current home loan rates — July 2026
Interest rates below are floating-rate home loans for salaried borrowers with a CIBIL score of 750+, on loan amounts up to ₹75 lakh. Rates vary within each bank based on your credit profile, loan-to-value ratio and existing relationship with the bank.
Bank
Home loan (from)
Car loan (from)
Personal (from)
Processing fee
SBI
8.40%
9.20%
11.15%
0.35% + GST
HDFC Bank
8.45%
9.15%
10.85%
0.50% + GST
ICICI Bank
8.50%
9.10%
10.75%
0.50% + GST
Axis Bank
8.55%
9.25%
10.99%
1.00% + GST (up to ₹25k)
Kotak Mahindra
8.65%
9.30%
10.99%
0.50% + GST
Bank of Baroda
8.35%
9.15%
11.40%
0.50% + GST (capped)
PNB
8.40%
9.25%
11.40%
0.35% + GST
LIC Housing
8.50%
—
—
0.25% + GST
Verify before signing. These are indicative starting rates as of 23 July 2026, sourced from bank websites and published loan schemes. Actual rates for your application depend on CIBIL score, income, employment type, loan amount, LTV, existing bank relationship, and any ongoing promotional offer. Ask for a written sanction letter, not just a verbal quote.
Three worked examples — see the calculation for real loan sizes
Example 1 · Home loan · ₹40 lakh, 20 years, 8.5%
P = 40,00,000 r = 8.5 ÷ 12 ÷ 100 = 0.007083 n = 20 × 12 = 240 months
EMI = 40,00,000 × 0.007083 × (1.007083)^240 / [(1.007083)^240 − 1]
= 40,00,000 × 0.007083 × 5.4408 / 4.4408
≈ ₹34,713 per month
Total paid = 34,713 × 240 = ₹83,31,120
Total interest = 83,31,120 − 40,00,000 = ₹43,31,120
You pay ₹43.3 lakh in interest to borrow ₹40 lakh. Every year of tenure
adds about ₹2 lakh more in total interest.
Example 2 · Car loan · ₹8 lakh, 7 years, 9.2%
P = 8,00,000 r = 9.2 ÷ 12 ÷ 100 = 0.007667 n = 7 × 12 = 84 months
EMI = 8,00,000 × 0.007667 × (1.007667)^84 / [(1.007667)^84 − 1]
≈ ₹12,953 per month
Total paid = 12,953 × 84 = ₹10,88,020
Total interest = 10,88,020 − 8,00,000 = ₹2,88,020
Cars depreciate ~15-20% per year. By year 4 the car is worth less than
the outstanding loan — the classic "underwater on the loan" scenario.
Shorter tenure car loans (5 years, not 7) prevent this.
Example 3 · Personal loan · ₹3 lakh, 3 years, 11.5%
P = 3,00,000 r = 11.5 ÷ 12 ÷ 100 = 0.009583 n = 3 × 12 = 36 months
EMI = 3,00,000 × 0.009583 × (1.009583)^36 / [(1.009583)^36 − 1]
≈ ₹9,893 per month
Total paid = 9,893 × 36 = ₹3,56,141
Total interest = 3,56,141 − 3,00,000 = ₹56,141
At 18.7% interest-to-principal ratio, personal loans are the most
expensive borrowing after credit cards. Prepay these first when
you have surplus cash — the interest saved beats almost any
investment return.
Reducing balance vs flat rate — the difference that costs lakhs
Some lenders — particularly in the vehicle finance and unsecured personal loan segments — advertise interest rates using the flat-rate method, which looks lower but is arithmetically the same as a much higher reducing balance rate.
Reducing balance is the RBI-standard method used by all Indian banks for regulated loans. Interest is charged only on the outstanding principal, which decreases every month as you repay. This is the method used in the calculator above and in the formula section below.
Flat rate charges interest on the original principal for the entire loan tenure, ignoring the fact that you have been repaying. If you borrow ₹5 lakh at a 10% flat rate for 3 years, you pay ₹50,000 interest per year for 3 years — ₹1.5 lakh total — even though by month 24 you have only about ₹1.7 lakh outstanding.
Flat rate quoted
Loan tenure
True reducing-balance equivalent
Where you'll see this
7%
3 years
≈ 12.8%
Two-wheeler loans, some used-car loans
8%
5 years
≈ 15.0%
Consumer durables, dealer finance
10%
3 years
≈ 18.3%
Older personal loan quotes
12%
4 years
≈ 22.4%
Loan against gold in some NBFCs
Before signing: If a lender quotes any interest rate under 10% on an unsecured loan, ask them in writing whether it is flat or reducing balance. Regulated banks must disclose the reducing balance equivalent under RBI's Fair Practices Code. NBFCs sometimes are less explicit — always demand the annualised percentage rate (APR), not just the "rate".
Your CIBIL score is a hidden line item on your EMI
Banks price risk. A borrower with a shakier credit history pays more per month for exactly the same loan. The table below shows typical home loan rate spreads by CIBIL score, and what that means in rupees on a ₹40 lakh, 20-year loan.
CIBIL score
Typical home loan rate
Monthly EMI
Total interest
Cost vs top tier
800+ Best
8.35%
₹34,334
₹42.40 L
Baseline
780–799
8.50%
₹34,713
₹43.31 L
+₹0.91 L
750–779 Good
8.75%
₹35,348
₹44.84 L
+₹2.44 L
720–749 Fair
9.15%
₹36,376
₹47.30 L
+₹4.90 L
700–719
9.65%
₹37,678
₹50.43 L
+₹8.03 L
Below 700 Costly
10.50% or NBFC
₹39,935+
₹55.84 L+
+₹13.44 L
On the same ₹40 lakh loan, the CIBIL score alone can change your total interest cost by ₹13.44 lakh across the tenure. If you are within six months of applying, three concrete moves usually add 20-40 CIBIL points: pay every credit card in full every month, keep credit utilisation under 30%, and do not apply for any new credit line during that window.
The tenure trap — why longer tenure costs more even at a lower EMI
Loan officers reach for tenure when your ability-to-pay looks tight. "Sir, take 25 years instead of 20, your EMI drops from ₹34,713 to ₹32,209." True — but here is the cost of that extra five years:
Tenure
Monthly EMI
Total interest
Extra cost vs 15 yrs
15 years
₹39,390
₹30.90 L
—
20 years
₹34,713
₹43.31 L
+₹12.41 L
25 years
₹32,209
₹56.63 L
+₹25.73 L
30 years
₹30,757
₹70.72 L
+₹39.82 L
Going from 15 to 30 years reduces your EMI by ₹8,633 per month — and adds ₹39.82 lakh to what you pay. The practical rule: take the shortest tenure you can comfortably afford, and use the prepayment simulator above to model annual bonuses as prepayments rather than as tenure buffer.
When foreclosing your loan makes financial sense
You have a lump sum — a bonus, an inheritance, an FD maturing. Should you use it to close the loan? The mathematically correct answer depends on the after-tax return on the alternative.
Rule of thumb: compare the loan's post-tax effective rate to the post-tax return on the best safe alternative.
Home loan at 8.5% with full Section 24 benefit (up to ₹2 lakh interest deductible per year) has an effective rate closer to 5.5-6% for a 30% tax-bracket borrower. If a safe FD pays 7.5% pre-tax (≈ 5.2% post-tax), foreclosing is neutral to marginally positive. If you can earn 8-10% post-tax elsewhere, do not foreclose.
Car loan at 9.2% has no tax benefit for personal use. Post-tax rate = 9.2%. Almost no safe alternative matches this. Prepay or foreclose.
Personal loan at 11.5% and credit card debt (usually 30%+ effective annualised) — no tax benefit, high rate. Foreclose immediately if you have the funds.
One important caveat: keep six months of EMI-equivalent as an emergency fund before foreclosing. Closing a loan and then needing an emergency loan at a higher rate to cover a medical bill is a common, avoidable trap.
EMI in arrears vs EMI in advance — the small print that matters
Two banks quote the same loan, same amount, same rate, same tenure, same EMI. One of them is cheaper. This is why:
EMI in arrears — the standard for home and personal loans — means the first EMI is deducted about one month after the loan is disbursed. You keep the full principal for that first month, so interest starts accruing from day one and the first EMI is a "normal" one.
EMI in advance — common in vehicle loans and some consumer durable loans — means the first EMI is deducted at the time of disbursement itself. Effectively you receive slightly less than the sanctioned amount, and the interest starts accruing on the reduced balance. The total interest is marginally lower, but so is what you get on day one.
For a ₹8 lakh car loan at 9.2% for 7 years: EMI is ₹12,953 either way. But in the advance model, the effective cost of borrowing is about 0.4% lower. Ask which model your lender uses. It changes the real APR and it changes the sanction-day cash you receive.
The EMI formula and its derivation
EMI = P × r × (1 + r)ⁿ / [(1 + r)ⁿ − 1]
Where:
P = Principal loan amount (₹)
r = Monthly interest rate = Annual rate ÷ 12 ÷ 100
n = Total number of monthly installments = Tenure in years × 12
Where the formula comes from
The formula solves one specific problem: what fixed monthly payment, made for n months, will fully repay a loan of P with monthly interest rate r? At each month, the outstanding balance grows by (1 + r) due to interest, and shrinks by the EMI amount. Setting the balance at month n to zero and solving for EMI produces the formula above. It is the same formula the PMT function in Excel uses.
Every regulated Indian lender uses this formula. What varies between lenders is (a) the interest rate itself, (b) how they round the calculation, and (c) how they handle month lengths (30 vs 31 days). The rounding rarely changes the EMI by more than ₹5 either way, but it can produce small mismatches between what this calculator shows and what your bank's system shows.
When does the EMI clock actually start after a home loan is disbursed? ▼
For a fully disbursed loan, the first EMI is charged on the pre-set EMI date of the following month. But for under-construction properties where the loan is disbursed in stages, you pay pre-EMI interest — interest only, no principal — on whatever amount has been disbursed so far, until the full loan is disbursed. Full EMI starts only after that. Pre-EMI months add to the total cost and are often not shown in the initial quote.
Does prepayment reduce my EMI or my tenure? ▼
By default, Indian banks apply prepayments to reduce the tenure, keeping the EMI constant. You can request in writing that the prepayment be used to reduce the EMI instead, keeping the tenure constant. Tenure reduction saves more interest overall. EMI reduction improves month-to-month cash flow. On a floating-rate home loan, RBI guidelines prohibit prepayment penalties for individual borrowers.
Is 10% flat rate the same as 10% reducing balance rate? ▼
No. A 10% flat rate is roughly equivalent to an 18-19% reducing balance rate on a 5-year loan. Flat rate charges interest on the original principal for the entire tenure, ignoring the fact that you have been repaying. Reducing balance — the RBI standard — charges interest only on the outstanding principal, which decreases every month. Always ask lenders to quote the reducing balance equivalent before signing.
How much does my CIBIL score actually affect my EMI? ▼
Significantly. On a ₹40 lakh home loan over 20 years, a CIBIL of 780+ typically gets a rate of about 8.35-8.65%, while a CIBIL of 700-720 gets 9.25-9.75%. That 0.9% gap translates to roughly ₹2,300 more per month in EMI and about ₹5.5 lakh more over the loan tenure. Personal and vehicle loans are even more CIBIL-sensitive because they are unsecured or partially secured.
What is the maximum EMI I can afford? ▼
The common banker's rule is 40% of take-home pay for all EMIs combined — home loan, car loan, personal loan, credit-card EMIs, everything. Take-home means net salary after PF, professional tax and TDS, not gross. If your in-hand salary is ₹80,000, all your EMIs together should stay under about ₹32,000. Exceeding this makes future loan approvals difficult and leaves no room for emergencies.
Does the EMI amount include GST? ▼
No. The EMI itself is not subject to GST because it is a repayment of borrowed money, not a service charge. However, the processing fee on the loan attracts 18% GST, and prepayment charges on non-home-loan products can also attract GST. Insurance premiums bundled with the loan attract GST separately. Read the loan sanction letter carefully — these charges are added to your effective cost of borrowing but are not part of the EMI.
What happens if I miss one EMI? ▼
The bank charges a late payment penalty (typically ₹500-1,500 or 2% of the EMI, whichever is higher) plus penal interest on the overdue amount. More importantly, the missed EMI is reported to CIBIL within 30 days as a delayed payment, dropping your score by 40-80 points. Three or more missed EMIs mean the loan can be classified as a Non-Performing Asset (NPA), triggering recovery action under the SARFAESI Act for secured loans.
When should I foreclose my loan? ▼
When the return on any alternative use of the same money is lower than the loan's interest rate — after adjusting for tax benefits. If your home loan rate is 8.5% and you get tax benefits on the interest (Section 24), your effective rate is closer to 5.5-6%. If a safe deposit gives you 7-7.5% post-tax, foreclosing may not be optimal. But on high-rate personal loans (11-14%) with no tax benefit, foreclosing is almost always the right call if you have the funds beyond an emergency reserve.
Is "No-Cost EMI" actually free? ▼
Not really. The interest that would have applied is absorbed by the seller as a discount that you would otherwise have received. On a ₹60,000 phone offered at ₹60,000 in No-Cost EMI vs ₹57,000 upfront, the ₹3,000 difference is the hidden interest. Also, GST is charged on the total (including hidden interest) not on the discounted upfront price, so you pay a slightly higher GST amount than an upfront buyer.
How is EMI on a credit card calculated? ▼
Credit card EMIs use a flat rate on the original transaction amount, not a reducing balance. The stated rate (say 14%) is applied to the full transaction value for each month, then divided across the tenure. This is why credit card EMIs often work out to an effective annual rate of 22-28% on a reducing balance basis, even when the flat rate looks reasonable. There is also a one-time processing fee (₹99-₹499) plus 18% GST on the fee.
Can I get a home loan with a floating and fixed rate mixed? ▼
Yes, several banks offer hybrid home loans. Typically the rate is fixed for the first 2-3 years (giving payment certainty during the highest interest-load period) and then converts to floating. On a 20-year loan, this can be useful if you expect rates to drop and want short-term stability. Confirm the conversion mechanism — some hybrid products revert to a fixed spread over the benchmark, others reset to prevailing rates at conversion.
What is the difference between EMI in arrears and EMI in advance? ▼
EMI in arrears — the standard for home and personal loans — means the first EMI is due about a month after disbursement, giving you one full billing cycle. EMI in advance means the first EMI is deducted at disbursement itself, often used for vehicle loans. The advance model reduces the effective loan tenure by one EMI and slightly reduces total interest, but it also reduces the amount you actually receive on disbursement day.
Are pre-EMI payments tax-deductible? ▼
Pre-EMI interest on a home loan is tax-deductible under Section 24, but only after the property construction is complete and you take possession. It is deductible in five equal installments starting from the year of possession, subject to the overall Section 24 limit of ₹2 lakh per year for self-occupied property. Track pre-EMI payments carefully — banks issue an interest certificate but it is up to you to claim it correctly.
How do I calculate my exact home loan EMI in Excel? ▼
Use the PMT function: =PMT(rate/12, tenure_months, -principal). For a ₹40 lakh loan at 8.5% over 20 years, that is =PMT(8.5%/12, 240, -4000000) which returns approximately ₹34,713. The negative sign on principal makes the result show as positive. Use PPMT and IPMT functions to see the principal and interest split for any given month.
Does making one extra EMI per year really save 5 years on a home loan? ▼
On a 20-year home loan taken at 8.5%, paying one extra EMI per year (roughly 8% annual prepayment on the outstanding) reduces the effective tenure by about 4.5 to 5 years and saves approximately 30% of the total interest. The reason: prepayments hit the principal directly, and the interest saved compounds over the remaining tenure. Use the prepayment simulator on this page to check your specific loan.
Important: The EMI figures produced by this calculator use the standard RBI reducing-balance formula and are accurate for the inputs provided. Actual loan amounts, EMIs and total interest quoted by your bank may vary because of processing fees, mandatory insurance, GST on charges, differences in day-count conventions, pre-EMI interest for under-construction properties, and floating-rate resets during the loan tenure. Bank rates shown in this page were verified against the respective bank websites on 23 July 2026 and change without notice. This page is educational and does not constitute financial advice. Consult your bank's loan officer and, for large borrowings, a SEBI-registered investment advisor before signing any loan agreement.