An EMI is the fixed monthly amount that clears a loan over its tenure. This page explains how it is worked out, shows what a change in tenure really costs, and links to the free calculator in the app.
Open the EMI calculatorCurrent DA rate
The EMI formula
EMI = P × r × (1 + r)n ÷ [(1 + r)n − 1]P = loan amount · r = monthly rate (annual rate ÷ 12 ÷ 100) · n = number of months
r = 8.5 ÷ 12 ÷ 100 = 0.00708 · n = 20 × 12 = 240 months
EMI = ₹8,678 per month
Total paid = ₹20,82,776 · of which interest = ₹10,82,776
What tenure really costs
The same ₹10,00,000 at 8.5%, over three different tenures:
| Tenure | Monthly EMI | Total interest | Total payable |
|---|---|---|---|
| 10 years | ₹12,399 | ₹4,87,828 | ₹14,87,828 |
| 15 years | ₹9,847 | ₹7,72,531 | ₹17,72,531 |
| 20 years | ₹8,678 | ₹10,82,776 | ₹20,82,776 |
Stretching from 10 years to 20 years drops the EMI by about ₹3,721 a month — but the interest bill grows from ₹4,87,828 to ₹10,82,776. A lower EMI is not a cheaper loan.
Where the money goes
Every instalment is split between interest and principal. In the first months the interest share is largest, because interest is charged on the outstanding balance and that balance is still nearly the full loan. As the principal falls, more of each fixed EMI goes to principal. This is also why prepaying early saves far more than prepaying late.
Service advances
Government and railway staff can take sanctioned advances — for house building and other purposes — which are recovered through the pay bill instead of a bank mandate. The instalment arithmetic is the same as above; what differs is the sanctioned rate, the recovery period and the limits that apply. Use the rate and tenure from your own sanction and put them into the calculator.
Common questions
What is EMI?
EMI stands for equated monthly instalment. It is the fixed amount you pay every month until the loan is closed. Each instalment covers the interest due for that month plus a part of the principal. Early on, most of the EMI goes to interest; towards the end, most of it goes to principal — even though the amount you pay never changes.
How is EMI calculated?
EMI equals P multiplied by r multiplied by (1 plus r) to the power n, divided by (1 plus r) to the power n minus one. P is the loan amount, r is the monthly interest rate (the annual rate divided by twelve and then by hundred) and n is the number of months. The calculator on this site uses exactly this formula.
What is the EMI on a 10 lakh loan?
At 8.5% a year over 20 years the EMI is about ₹8,678 a month. Over 15 years it rises to about ₹9,847, and over 10 years to about ₹12,399. The shorter the tenure, the higher the monthly payment but the lower the total interest.
Does a longer tenure make a loan cheaper?
No. A longer tenure lowers the monthly EMI but raises the total interest, often by a lot. On a 10 lakh loan at 8.5%, moving from 10 years to 20 years cuts the EMI by roughly ₹3,721 a month, but the total interest rises from about ₹4,87,828 to about ₹10,82,776.
How much of my salary should go to EMI?
Lenders usually want your total EMIs to stay within about 40 to 50 percent of net take-home pay, and for government staff there are also recovery limits on service advances. Work from your actual in-hand figure after DA, HRA and deductions, not from basic pay — the in-hand salary estimator in the app gives you that number.
Does prepaying a loan help?
Yes, and most in the early years. A prepayment goes straight against principal, so every rupee removed early also removes all the future interest that principal would have attracted. The same prepayment made near the end of the tenure saves very little.
Is this the same as the EMI on a government service advance?
The arithmetic is the same, but service advances such as a house building advance run on their own sanctioned rate and recovery schedule, and recovery happens through your pay bill rather than a bank mandate. Use the current rules for your advance and put that rate and tenure into the calculator.
Calculate it for your own pay
RailStaff's free calculators work out overtime, night duty allowance, kilometre allowance, leave encashment, arrears and your in-hand salary — and the running journal keeps your T-26B duty record.