Loans & Credit

What Is EMI?

EMI (equated monthly installment) is the fixed amount a borrower pays every month to repay a loan, covering both interest and principal. The term is widely used in India, Pakistan, and other countries for home, car, and personal loans; elsewhere it is usually just called the monthly payment.

EMI Formula

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

Example

A loan of 500,000 at 9% per year for 5 years (60 months) has a monthly rate of 0.75% and an EMI of about 10,379.

EMI on a Flat Rate

If a loan is quoted with a flat interest rate instead of a reducing balance rate, the EMI is higher for the same headline rate, because interest is charged on the full original amount for the whole term.

🧮 Calculate It Yourself

Put EMI (Equated Monthly Installment) into practice with these free calculators — no sign-up, nothing stored.

💳 Loan Calculator (EMI) Works for any loan type — find your monthly payment and total interest. Calculate → ⚖️ Flat vs. Reducing Balance Rate Calculator Compare flat and reducing-balance loans and find the true effective rate. Calculate → 📅 Amortization Schedule Calculator See your full year-by-year loan breakdown and what an extra payment saves. Calculate →

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Last updated: September 27, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.