EMI Calculator 2026

EMI = P × R × (1+R)^N / [(1+R)^N − 1], where P is the principal, R the monthly interest rate (annual rate / 12 / 100) and N the tenure in months. The instalment stays level while its interest and principal split changes every month.

Either — you choose. Keeping the EMI unchanged and cutting the tenure saves far more interest; reducing the EMI eases monthly cash flow but stretches the loan. On floating-rate home loans banks default to reducing tenure unless you ask otherwise.

A flat rate charges interest on the full original principal for the whole tenure. Reducing balance recalculates interest monthly on the outstanding principal, so it costs far less. A 10% flat rate is roughly equivalent to 17%–18% reducing balance — always compare on a reducing-balance basis.

Interest is charged on the outstanding balance, which is highest at the start. On a 20-year home loan roughly 70% of the first year's EMIs is interest, falling below 50% only around year 12. This is also why prepaying early saves disproportionately more.

On a repo-linked floating loan the bank resets your rate at least once a quarter, but by default it passes the benefit to tenure, not to the instalment. On Rs 50 lakh at 9% over 20 years the EMI is about Rs 44,986; if the rate drops to 8.5% and the EMI is held, the loan finishes in roughly 219 months instead of 240, saving nearly two years. If you want the cash flow instead, write to the bank asking for EMI reduction. Most charge a small conversion or switch fee.

MCLR is the bank internal cost of funds, so rate cuts reach you slowly and only at your reset date, often a year away. EBLR is linked externally to the RBI repo rate and must reset at least quarterly, so cuts and hikes both pass through faster. Since October 2019 all new floating retail loans are EBLR. If you are still on MCLR or an old base rate, ask for a conversion. Banks charge a switch fee of roughly Rs 1,000 to Rs 5,000 plus GST, which usually pays back within a year.

The bank first levies a cheque or mandate bounce charge of about Rs 500 to Rs 750 plus GST, and penal charges on the overdue amount, which RBI now requires to be shown as a separate penal charge rather than added to the interest rate. A payment less than 30 days late is usually not reported. Once you cross 30 days it appears in your CIBIL report as DPD and stays on the record for years. Ninety days overdue makes the account an NPA, which is far harder to repair.