A personal-loan EMI is not merely the amount due next month. The rate and tenure that produce a manageable EMI also determine how much interest you pay overall.
This guide explains the formula once, then focuses on the numbers that matter: monthly EMI, total interest and total repayment.
The EMI formula
For a reducing-balance loan:
EMI = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)
Where:
- P is the principal borrowed.
- r is the monthly interest rate: annual rate ÷ 12 ÷ 100.
- n is the number of monthly payments.
For ₹5 lakh at 12% for five years:
- P = ₹5,00,000
- r = 12 ÷ 12 ÷ 100 = 0.01
- n = 5 × 12 = 60
The estimated EMI is ₹11,122. Across 60 payments, total repayment is about ₹6,67,333, including approximately ₹1,67,333 of interest.
Check the live result in the Personal Loan EMI Calculator.
Quick personal-loan EMI table
The examples below use a 12% annual reducing rate and exclude fees:
| Loan amount | Tenure | Monthly EMI | Total interest | Total repayment |
|---|---|---|---|---|
| ₹1 lakh | 3 years | ₹3,321 | ₹19,572 | ₹1,19,572 |
| ₹3 lakh | 5 years | ₹6,673 | ₹1,00,400 | ₹4,00,400 |
| ₹5 lakh | 5 years | ₹11,122 | ₹1,67,333 | ₹6,67,333 |
| ₹10 lakh | 5 years | ₹22,244 | ₹3,34,667 | ₹13,34,667 |
These are comparison examples—not advertised lender rates. Your offer can differ based on credit profile, income, employer or business, existing debt and lender policy.
For other amounts, use the dedicated pages for ₹1 lakh, ₹5 lakh or ₹10 lakh.
What changes the EMI?
Loan amount
At the same rate and tenure, EMI moves directly with principal. A ₹10 lakh loan has twice the EMI of a ₹5 lakh loan under identical assumptions.
Interest rate
A higher rate raises both EMI and total interest. Compare the annual percentage rate and all disclosed charges—not only a promotional rate.
RBI requires regulated lenders to provide a Key Facts Statement for covered retail and MSME term loans. Review the APR, repayment schedule and charges before signing.
Tenure
A longer tenure lowers EMI but keeps interest running for more months.
For ₹5 lakh at 12%:
| Tenure | Approximate EMI | Approximate total interest |
|---|---|---|
| 3 years | ₹16,607 | ₹97,858 |
| 5 years | ₹11,122 | ₹1,67,333 |
| 7 years | ₹8,826 | ₹2,41,415 |
The seven-year option looks easier each month, but costs roughly ₹1.44 lakh more interest than the three-year option.
EMI does not include every borrowing cost
The formula calculates principal and interest. Your real cost may also include:
- Processing fee and tax
- Documentation or verification charges
- Credit-protection insurance
- Late-payment and dishonour charges
- Switching or restructuring fees
- Prepayment or foreclosure charges where permitted
If a fee is deducted before disbursement, you may receive less cash than the sanctioned principal while still repaying the full loan.
Read the amortisation schedule
Each EMI contains interest and principal. Early payments usually contain a larger interest component because the outstanding balance is higher. As principal falls, the interest portion declines.
Open the amortisation chart in the calculator to see:
- Opening balance
- Interest charged each month
- Principal repaid
- Closing balance
This is especially useful when considering prepayment. A lump sum made earlier usually avoids more future interest than the same payment made near the end.
Use EMI as a budget test
Before borrowing:
- Add the new EMI to every existing EMI.
- Compare the total with monthly take-home income.
- Leave room for essentials, insurance and savings.
- Test a shorter tenure.
- Check total repayment—not only EMI.
Use the Loan Eligibility Calculator to estimate how much borrowing your income may support or how much income a target loan may require.
Frequently asked questions
Is a lower EMI always better?
No. It may result from a longer tenure and substantially higher total interest.
Is personal-loan interest calculated on the original amount every month?
Most standard EMI loans use a reducing balance, so monthly interest is calculated on the outstanding principal. Confirm the method in the Key Facts Statement.
Can the EMI change?
It can change on a floating-rate loan or after restructuring. Fixed-rate personal loans generally follow the agreed schedule unless the contract provides otherwise.
Why does my lender’s result differ slightly?
Differences can arise from rounding, payment dates, day-count methods, fees, insurance or the lender’s exact repayment convention.