Loan Interest Calculator
How much will this loan actually cost you? Enter the amount, rate and tenure to see the total interest, and how sharply it changes if you shorten the term.
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How to use this calculator
- Enter loan amount
- Enter interest rate
- Enter tenure
- Read the result — it updates as you type.
The formula used
Total interest = (EMI × number of months) − Loan amount
- EMI
- P × i × (1+i)ⁿ ÷ ((1+i)ⁿ − 1)
- i
- Monthly rate = annual ÷ 12 ÷ 100
- n
- Number of months
Interest is charged each month on the balance still outstanding, so the exact total comes from running the full schedule. The shortcut above gives the same answer.
Worked example
₹10,00,000 at 10% for 10 years.
- EMI₹13,215
- Months120
- Total repaid = ₹13,215 × 120 = ₹15,85,800
- Total interest = ₹15,85,800 − ₹10,00,000 = ₹5,85,800
Every ₹1 borrowed costs ₹0.59 in interest. Over 20 years at the same rate it would cost ₹1.32 — more than the loan itself.
Why tenure matters more than you expect
Borrowers usually shop for the lowest EMI. That is the wrong number to optimise — the EMI only tells you what fits your monthly budget, not what the loan costs.
The trade-off, in numbers
On ₹10 lakh at 10%, a 10-year loan costs ₹5.86 lakh in interest. Stretching it to 20 years drops the EMI by around ₹3,500 a month but pushes the total interest past ₹13 lakh. You pay more than twice as much for the comfort.
A useful rule
Borrow over the shortest tenure whose EMI you can comfortably sustain, including in a bad month. If the shorter EMI is genuinely tight, take the longer tenure and prepay whenever you can — see the Prepayment Calculator.
Tips and common mistakes
Getting more out of it
- Compare the same loan at 10, 15 and 20 years before signing. The difference is usually larger than any rate negotiation would achieve.
- Use "interest per ₹1 borrowed" as a quick sanity check on whether the loan is worth taking.
Mistakes to avoid
- Judging affordability by the EMI alone and never looking at the total.
- Leaving out processing fees, typically 0.5–2% of the loan amount.
- Comparing loans of different tenures by their EMIs rather than their total cost.
Frequently asked questions
Why is total interest so much higher on a longer loan?
Because interest is charged on the outstanding balance every month. A longer tenure means the balance stays high for longer, so more months of interest accumulate.
Does a lower EMI mean a cheaper loan?
No — usually the opposite. A lower EMI almost always comes from a longer tenure, which increases the total cost.
Are processing fees included?
No. Add them separately; they are typically 0.5–2% of the loan amount, sometimes with GST on top.
What if my rate changes?
On a floating-rate loan the bank usually adjusts the tenure rather than the EMI. Re-run the calculation with the new rate to see the impact.
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