EMI calculator
Work out the fixed monthly installment on a car loan, home loan or personal loan. You get the monthly payment, the total interest, a full month-by-month schedule and a comparison mode for testing two loan options against each other.
Your loan
Option A
Option B
Monthly EMI
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Principal
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Total interest
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Total repayable
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Difference in total interest
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| Measure | Option A | Option B |
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Show the working
The standard amortizing loan formula, with your figures substituted in:
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Results are rounded to the nearest unit of currency. Your lender may round differently or add processing fees, so treat this as an estimate.
Amortization schedule
How each payment splits between interest and principal. Yearly summary shown; download the CSV for every month.
| Year | Paid | Principal | Interest | Balance |
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How to use this calculator
- Loan amount: the amount you are borrowing, after any down payment. For a car costing 3,000,000 with 750,000 paid upfront, enter 2,250,000.
- Annual interest rate: the yearly rate your lender quotes. Enter 9.5 for 9.5%, not 0.095. If your quoted rate (APR) already includes fees, the EMI shown here will be slightly higher than your actual payment.
- Loan tenure: how long you will take to repay the loan. Use the dropdown to switch between years and months.
- Compare two: switch to this mode to test a shorter tenure against a longer one, or the rate you have been offered against a rate you are hoping to negotiate.
The EMI formula
Every standard loan with equal monthly payments uses the same formula:
EMI = P × r × (1 + r)n ÷ ((1 + r)n − 1)
P is the loan amount, r is the monthly interest rate (the annual rate divided by 12, then by 100) and n is the number of monthly payments. The payment stays the same for the whole loan, but what it pays for changes over time: early installments are mostly interest, and later ones are mostly repayment of the loan itself.
Most borrowers never notice this shift, which is why the schedule matters. On a 20-year loan at 9.5%, about 85% of your first payment goes on interest. More of each payment does not go toward the loan itself than toward interest until about twelve and a half years in.
Car loans and home financing in Pakistan
Many banks in Pakistan price car loans and home financing as KIBOR plus a fixed margin. The rate is often reset once a year in line with KIBOR, so your monthly installment can go up or down during the loan. To see the effect of a rate change, use the compare mode with your current rate and a rate one or two points higher.
Islamic banks offer car and home financing through structures such as Ijarah and diminishing Musharakah. These use rental payments instead of interest, but the monthly amount is usually worked out in a very similar way, so this calculator still gives a useful estimate.
Banks also usually charge a processing fee and require insurance on the car, and some ask for a minimum down payment. None of these are included here, so add them to your budget separately.
What changes your EMI
There are three levers, and they have very different effects.
Borrowing less reduces both the monthly payment and the total interest by the same proportion. A loan that is 10% smaller costs 10% less every month and 10% less in interest overall.
A lower interest rate is the most effective lever, because interest is charged on the balance you still owe. On a long loan, cutting the rate by one percentage point often saves more than a year's worth of payments over the full term.
A longer tenure is the lever people reach for first, and the one to be most careful with. It lowers the monthly payment, which feels like relief, but it raises the total cost, often by a lot. Try the compare mode with 15 years against 30 years at the same rate and loan amount. In most cases, the 30-year loan costs more than twice as much in interest, for a monthly payment that is only around a quarter lower.
Paying off a loan early
Because interest is charged on the outstanding balance, any extra payment reduces all your future interest as well as the loan itself. Timing makes a big difference. An extra payment in the second year saves far more than the same payment in the fifteenth year, because the amount it clears would otherwise have been charged interest for many more years.
Check your loan terms before you make extra payments, though. Some lenders charge a fee for early repayment, especially on fixed-rate loans, and some put extra payments toward future installments instead of reducing the balance, which saves you nothing.
Not financial advice. This calculator uses the standard loan formula. It does not include processing fees, insurance, rate changes during the loan or your lender's rounding. Confirm the figures with your lender before you sign, and speak to a qualified adviser about whether a loan suits your situation.
Frequently asked questions
What is an EMI?
EMI stands for equated monthly installment. It is a fixed payment you make every month until the loan is repaid. Each payment covers that month's interest, and the rest reduces the amount you owe. The payment stays the same, but the split between interest and repayment changes every month.
How is EMI calculated?
With the formula above. The monthly rate is the annual rate divided by 12 (and by 100), and the power is the number of months in the loan. The calculator shows the formula with your own numbers in the working panel, so you can check it yourself.
How do I calculate the EMI on a car loan?
Enter the car price minus your down payment as the loan amount, then the bank's annual rate and the loan tenure. For example, a loan of 2,250,000 at 18% for 5 years has an EMI of about 57,135 a month. Remember to budget separately for insurance and the processing fee.
Can I reduce my EMI?
You can borrow less, negotiate a lower rate or extend the tenure. Moving your loan to a cheaper lender can lower the rate, and is worth looking into if rates have fallen or your credit record has improved. Extending the tenure should be a last resort, because it increases the total you pay.
What happens if I miss an installment?
Most lenders charge a late fee after a short grace period and may report the missed payment to the credit bureau. Repeated missed payments can lead to penalty charges and, on a secured loan such as a car loan, repossession. If you expect to miss a payment, contact your lender before the due date, because rescheduling is usually possible and far cheaper than defaulting.
Why does my bank quote a different EMI?
Usually for one of three reasons: the bank includes fees or insurance in the payment, it calculates interest daily instead of monthly, or it rounds differently. A difference of a few rupees a month is normal, but a difference of more than 1% or 2% is worth asking about.
Is a shorter loan tenure always better?
It always costs less in total interest. However, a higher monthly payment leaves you less room if your income drops, and a loan you can comfortably afford is safer than one that stretches you. A good rule is to choose the shortest tenure whose payment you could still manage if your income fell.