Before taking a car loan, home loan or personal financing, the most important number is your EMI (equated monthly instalment), the fixed amount you pay every month. Knowing it in advance tells you whether the loan fits your budget.
The EMI formula
EMI = P × r × (1 + r)n ÷ ((1 + r)n − 1)
- P = loan amount (principal)
- r = monthly interest rate (annual rate ÷ 12 ÷ 100)
- n = number of monthly instalments
Example
Loan of Rs 1,000,000 at 18% per year for 3 years (36 months): r = 0.015. The EMI comes to about Rs 36,152. Over 36 months you repay about Rs 1,301,470, so total interest is roughly Rs 301,470.
Calculate yours
- Open the Loan EMI Calculator.
- Enter the loan amount, annual interest rate and tenure.
- See the monthly EMI, total interest and total payment.
What changes your EMI
- Longer tenure lowers the EMI but increases the total interest you pay.
- Higher rate raises both the EMI and total interest. Many Pakistani bank loans are linked to KIBOR, so the rate can change during the loan.
- Bigger down payment reduces the principal and everything that follows.
Tips before you sign
- Keep total EMIs within a comfortable share of your monthly income.
- Ask about processing fees, insurance and early-settlement charges; they are not in the EMI.
- Compare at least two offers using the same tenure.
Related calculators
This guide is for general information only and is not financial advice. Confirm final figures with your bank.
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