Loan Calculator

What does this Loan Calculator do?

This calculator estimates the monthly payment for any amortizing loan — home, auto, or personal — using the same standard formula banks use to compute equal monthly installments over the life of a loan.

The formula

Payment = P × r × (1 + r)ⁿ ÷ [(1 + r)ⁿ − 1], where P is the loan amount, r is the monthly interest rate, and n is the number of monthly payments.

Step-by-step example

For a ₹25,00,000 home loan at 9% annual interest over 15 years (n = 180 months, r = 0.0075): monthly payment ≈ ₹25,356. Over the full term, total payments ≈ ₹45,64,080, meaning total interest paid ≈ ₹20,64,080.

Tips & common mistakes

• This estimate covers principal and interest only — it does not include property taxes, homeowner's insurance, PMI, or loan origination fees, all of which add to your actual monthly cost on a real mortgage.
• Shortening the loan tenure increases the monthly payment but substantially reduces total interest paid — worth modeling both ways before committing.
• Fixed-rate and variable-rate loans behave very differently over time — this calculator assumes a fixed rate for the entire tenure.

Fixed-rate versus variable-rate loans

This calculator assumes a fixed interest rate for the entire loan term, which is the simpler and more predictable case. Variable-rate (or floating-rate) loans adjust their rate periodically based on a benchmark rate, meaning your actual EMI or total interest can differ from a fixed-rate projection — useful to keep in mind if you're comparing a fixed-rate offer against a variable-rate one.

What affects your approved loan amount

Lenders typically look well beyond just the loan calculation itself — income, existing debt obligations, credit history, and the loan-to-value ratio (for secured loans like mortgages) all factor into what amount and rate you're actually offered, separate from the pure amortization math this calculator handles.

Frequently asked questions