₨EMI / Loan Calculator

Look at the total interest, not the monthly payment. That is the whole point of this page.

Most people compare loans on the instalment, because it is the number that affects next month. But a longer term reduces the instalment while increasing what the loan costs you overall, often by a great deal. Stretching a loan from five years to seven makes every month easier and can add a substantial amount to the final bill.

Both figures are shown here for exactly that reason. Change the term and watch them move in opposite directions.

Ask which rate you are being quoted

This uses the reducing-balance formula, where interest accrues on the outstanding balance and each instalment covers that plus a portion of the principal. Early payments are mostly interest; later ones are mostly principal.

Some lenders quote a flat rate instead, calculated on the original amount for the whole term. A flat rate sounds lower and costs considerably more. If a quoted rate seems better than everyone else’s, this is usually why — ask explicitly.

What this does not include

Processing fees, insurance bundled into the loan, and other charges that vary by lender. These can move the real cost noticeably, which is why the bank’s figure will not match this one exactly.

Comparing two offers

Enter both and compare the totals, not the instalments. Over a long term a single percentage point changes the total interest by more than most people expect — it is worth the two minutes.

Paying early

On a reducing-balance loan it saves real money, since interest accrues on what remains. Check for prepayment penalties first; some lenders charge enough to erase the benefit.

This is arithmetic to help you compare options, not financial advice. Confirm the actual terms with the lender before committing to anything.