Loan EMI comparison calculator

Compare up to 4 loans side by side. See monthly EMI, total interest, and total payable instantly — home loans, car loans, personal loans.

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Amortization schedule

How EMI is calculated

EMI (Equated Monthly Installment) is a fixed payment made by a borrower to a lender each month. It includes both principal repayment and interest, calculated so that the loan is fully repaid by the end of the tenure.

EMI = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)

P = Principal loan amount
r = Monthly interest rate (annual rate ÷ 12 ÷ 100)
n = Loan tenure in months

Principal vs interest breakdown

In the early months of a loan, a larger share of each EMI goes toward interest. As the outstanding principal decreases, the interest component shrinks and the principal component grows. This is called an amortizing loan. The amortization schedule below shows this breakdown month by month.

Tips to reduce total interest

Making a larger down payment reduces the principal and therefore total interest paid. Choosing a shorter tenure increases monthly EMI but significantly reduces total interest cost. Even one extra EMI per year (prepayment) can shorten your loan by 2–3 years. Compare loans using this tool to find the optimal balance between affordable monthly payments and lowest total cost.

Decision Support

Don't just pick the lowest EMI

The lowest monthly payment usually comes from the longest tenure — check the "Total interest" and "Extra vs best" figures too, since a lower EMI can still mean paying far more over the life of the loan.

Use the "Best" highlight as a starting point, not a final answer

The card marked Best has the lowest EMI among the loans you entered — it isn't automatically the best overall deal if it also has a much longer tenure. Weigh both figures together.

Match the preset to your actual loan type

Home, car, personal, and business loan presets use realistic starting rates and tenures for each category — starting from the right preset gets you a more useful comparison faster than starting from Custom.

➜ Next step: Once you've picked a loan, run the exact numbers through the EMI Calculator for a single detailed breakdown, or check overall affordability with the Auto Loan Calculator if you're financing a vehicle.

Common Mistakes

Comparing rates without matching tenure

A lower rate with a longer tenure can still cost more in total interest than a higher rate with a shorter tenure — always compare the full picture, not the headline rate alone.

Ignoring fees and charges

This calculator compares principal, rate, and tenure — it doesn't include processing fees, insurance, or other bank charges that can meaningfully change which loan is actually cheapest.

Assuming flat rate and reducing balance are the same

A flat rate loan charges interest on the full original principal for the entire tenure, while reducing balance (used here) charges interest only on what's still owed — the same quoted rate produces very different real costs under each method.

Sizing the EMI to what a bank will approve, not what you can afford

Banks often approve EMIs up to 40–50% of net income, but approved doesn't mean comfortable — leave room in your budget for other expenses and financial goals.

References

🏛️ State Bank of Pakistan

Policy rate and banking regulation — sbp.org.pk

📄 Your bank's loan agreement

Exact rate, fees, and calculation method (flat vs. reducing balance) vary by bank — always confirm against your own loan's official terms before deciding.

Last updated: 13 July 2026 · Uses the standard reducing-balance EMI formula — confirm your bank uses the same method before comparing quoted rates directly.

Frequently asked questions

EMI stands for Equated Monthly Installment — the fixed monthly payment you make to repay a loan. Each EMI covers both principal and interest. Early payments are interest-heavy; later payments are mostly principal repayment.

EMI = P × r × (1+r)^n / ((1+r)^n - 1), where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the tenure in months. This is the reducing balance method used by most banks.

A longer tenure gives lower monthly EMI but much higher total interest. A shorter tenure means higher EMI but significantly lower total cost. If you can afford it, a shorter tenure always saves money. Use this tool to see the exact difference.

Flat rate calculates interest on the full original principal throughout the tenure. Reducing balance calculates interest only on the outstanding principal each month, which decreases over time. Reducing balance results in lower total interest and is the standard method used by most banks.

Most banks allow a maximum EMI of 40–50% of your monthly net income. If your monthly salary is PKR 100,000, your maximum EMI should be around PKR 40,000–50,000. Use this calculator to find which loan amount and tenure keeps your EMI within that range.

Home loan rates in Pakistan typically range from 18% to 24% per annum depending on the bank, tenure, and borrower profile. Rates fluctuate with the State Bank of Pakistan policy rate. Compare multiple bank rates using this tool to find the best deal.