EMI Calculator: Monthly Loan Installment Calculator

Enter the loan amount, the annual interest rate and how long you'll take to repay it. You get the monthly EMI, the total interest over the life of the loan, and a year-by-year breakdown of how much of each payment goes to principal versus interest.

How EMI is actually calculated

EMI stands for equated monthly installment, a fixed payment that combines both principal and interest so the loan is fully paid off by the end of its tenure. The formula is EMI = P × r × (1+r)ⁿ / ((1+r)ⁿ − 1), where P is the loan amount, r is the monthly interest rate (your annual rate divided by 12), and n is the total number of monthly payments. Because interest is charged on the outstanding balance, the split between principal and interest shifts over time: early payments are mostly interest, later payments are mostly principal, even though the EMI amount itself stays fixed.

What actually reduces the total interest

Three levers move the total interest number: a lower interest rate, a shorter tenure, or extra principal-only prepayments during the loan. Of the three, shortening the tenure usually has the biggest effect, because it cuts the number of months interest has a chance to accrue on the outstanding balance, sometimes even more than a modest rate reduction would. Try the calculator with the same loan amount at, say, 15 years versus 10, and the total interest difference tends to be larger than most people expect.

What this calculator assumes

This uses a standard fixed-rate, fixed-EMI amortization calculation. It doesn't account for processing fees, insurance add-ons, floating or step-up rate structures, or prepayment penalties, all of which vary by lender in Nepal. Treat the numbers here as a planning estimate and confirm the exact repayment schedule with your bank or finance company before signing.