Is it better to prepay a loan or invest the money?

Compare the loan's interest rate with the return you could reasonably expect after tax and risk. Paying off a high-interest loan is a guaranteed saving equal to its rate.

Does a longer loan term reduce the EMI?

Yes, the monthly payment falls, but the total interest you pay rises.

Does my EMI change if the interest rate changes?

On a floating-rate loan your lender may change the EMI or the term. The calculator assumes a fixed rate.

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How loan EMI works and how extra payments save interest

30 Oct 2026, 9:00 am UTC

What is a loan EMI?

An EMI (equated monthly instalment) is the fixed monthly payment on a loan such as a mortgage, car loan or personal loan. Each payment covers that month's interest first and the rest reduces the amount you owe.

How is the monthly loan payment calculated?

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

How loan EMI works and how extra payments save interest

What is a loan EMI?

How is the monthly loan payment calculated?

Loan EMI example: 200,000 over 20 years

How much does an extra monthly payment save?

How should I compare loans?

Try the calculator

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