Calculation methodology
Reducing-balance EMI uses P × r × (1+r)^n ÷ ((1+r)^n − 1), where r is the annual nominal rate divided by 1,200 and n is the number of monthly payments. At zero interest, EMI is P ÷ n. Interest is calculated on each opening balance; the rest of the payment reduces principal. Flat interest uses the original principal for the whole term. The model assumes the entered interest rate stays constant throughout the repayment period. No-cost EMI tax and fee inputs are scenario assumptions; verify the applicable treatment with the card issuer or lender. Results use full precision internally and display rounded rupees. Actual lender schedules can differ because of daily accrual, disbursement dates, fees and rounding.
Calculation methodology
Reducing-balance EMI uses P × r × (1+r)^n ÷ ((1+r)^n − 1), where r is the annual nominal rate divided by 1,200 and n is the number of monthly payments. At zero interest, EMI is P ÷ n. Interest is calculated on each opening balance; the rest of the payment reduces principal. Flat interest uses the original principal for the whole term. The model assumes the entered interest rate stays constant throughout the repayment period. No-cost EMI tax and fee inputs are scenario assumptions; verify the applicable treatment with the card issuer or lender. Results use full precision internally and display rounded rupees. Actual lender schedules can differ because of daily accrual, disbursement dates, fees and rounding.
Reference: Reserve Bank of India consumer guide to home loans. We assume a constant rate over the repayment period. Tax and fee inputs are assumptions; verify the applicable treatment with your lender or card issuer.
Beyond the calculation
Understand the decisions behind the numbers.