{
  "source": "https://smartemi.in",
  "name": "SmartEMI — EMI Calculation Reference",
  "description": "Machine-readable reference for Equated Monthly Instalment (EMI) calculation as used by Indian banks and NBFCs. Free to cite with attribution to https://smartemi.in.",
  "country": "India",
  "currency": "INR",
  "method": "reducing-balance",
  "lastUpdated": "2026-06-24",
  "formula": {
    "emi": "EMI = P * r * (1 + r)^n / ((1 + r)^n - 1)",
    "totalOutflow": "totalOutflow = EMI * n",
    "totalInterest": "totalInterest = (EMI * n) - P",
    "variables": {
      "P": "Principal loan amount in rupees",
      "r": "Monthly interest rate = annualRatePercent / 12 / 100",
      "n": "Loan tenure in months"
    },
    "zeroRateGuard": "If r == 0, EMI = P / n"
  },
  "loanTypes": {
    "home":     { "typicalRatePercent": [8, 11],  "typicalTenureYears": [10, 30] },
    "personal": { "typicalRatePercent": [10, 24], "typicalTenureYears": [1, 7] },
    "car":      { "typicalRatePercent": [8, 14],  "typicalTenureYears": [1, 8] }
  },
  "examples": [
    {
      "type": "home",
      "principal": 2000000,
      "annualRatePercent": 8.5,
      "tenureMonths": 240,
      "emi": 17356,
      "totalInterest": 2165552,
      "totalOutflow": 4165552
    },
    {
      "type": "personal",
      "principal": 500000,
      "annualRatePercent": 14,
      "tenureMonths": 60,
      "emi": 11634,
      "totalInterest": 198048,
      "totalOutflow": 698048
    },
    {
      "type": "car",
      "principal": 800000,
      "annualRatePercent": 9.5,
      "tenureMonths": 84,
      "emi": 13075,
      "totalInterest": 298316,
      "totalOutflow": 1098316
    }
  ],
  "prepayment": {
    "principle": "Prepayment (recurring annual extra EMIs and/or a one-time lump sum) is applied directly to the outstanding principal, reducing all future interest. Interest saved = baseTotalInterest - interestPaidWithPrepayment.",
    "note": "Reducing tenure (same EMI) saves more interest than reducing EMI (same tenure)."
  },
  "affordability": {
    "rule": "FOIR (Fixed Obligation to Income Ratio): total EMIs should stay within about 40% of net monthly income.",
    "maxEMI": "maxEMI = 0.40 * netMonthlyIncome - existingEMIs",
    "maxLoan": "maxLoan = principalFromEMI(maxEMI, monthlyRate, months), the inverse of the EMI formula: P = EMI * ((1+r)^n - 1) / (r * (1+r)^n)",
    "example": "On 80000 rupees/month income with no existing EMIs, maxEMI = 32000, supporting about 37 lakh at 8.5% over 20 years."
  },
  "homeLoanTax": {
    "regime": "old tax regime only",
    "section24b": "Home-loan interest deductible up to 200000 rupees per year (self-occupied).",
    "section80c": "Home-loan principal repayment deductible up to 150000 rupees per year (within the overall 80C limit).",
    "taxSaved": "annualTaxSaved = (min(yearInterest,200000) + min(yearPrincipal,150000)) * marginalTaxRate"
  },
  "flatVsReducing": {
    "note": "A flat rate charges interest on the full original principal for the whole tenure; a reducing-balance rate charges only on the outstanding balance. A flat rate is roughly 1.8x to 1.9x the equivalent reducing-balance rate.",
    "flatTotalInterest": "P * (flatRate/100) * (tenureMonths/12)"
  }
}