🏦 EMI Calculator
Loan Details
Monthly EMI
Loan Summary
| Principal Amount | PKR 0 |
| Monthly Interest Rate | 0% |
| Total Number of Payments | 0 |
| Total Payment | PKR 0 |
| Total Interest Paid | PKR 0 |
| Monthly EMI | PKR 0 |
How to Use the EMI Calculator
An EMI (Equated Monthly Installment) is the fixed monthly payment you make to repay a loan. It consists of two parts: the principal repayment and the interest charge. In the early months of a loan, most of your EMI goes toward interest — over time, more goes toward the principal.
Enter your loan amount, annual interest rate (currently 15–22% for most Pakistani banks), and loan tenure in years. The calculator instantly shows your monthly EMI and generates a complete amortization schedule — year-by-year or month-by-month — so you can see exactly how your loan balance reduces over time.
EMI = P × r × (1+r)^n ÷ [(1+r)^n – 1]
Full schedule showing principal vs interest each year/month
See total cost of borrowing over full loan tenure
📖 Complete Guide to Loan EMI in Pakistan — Formula, Types & Interest Saving Tips
What is EMI and How Does the Formula Work?
EMI (Equated Monthly Installment) is a fixed monthly payment that covers both principal repayment and interest on a reducing-balance loan. All Pakistani banks use the standard formula:
Where P = Principal, r = Monthly rate (Annual rate ÷ 12), n = Total months. Example: PKR 30 lac at 18% for 10 years → r = 0.015, n = 120 → EMI = PKR 53,940. Total paid = PKR 64.7 lac — you pay PKR 34.7 lac in interest on a PKR 30 lac loan.
Reducing Balance vs Flat Rate — Critical Difference
| Method | How Interest is Charged | Effective Cost | Used By |
|---|---|---|---|
| Reducing Balance | On outstanding principal only — decreases monthly as you repay | Lower total interest | All regulated Pakistani banks (SBP requirement) |
| Flat Rate | On original principal for entire tenure — does not reduce | Much higher — 10% flat ≈ 18%+ reducing | Some informal lenders — avoid |
How Much Loan Can You Afford? — DBR Rule
SBP requires banks to maintain a Debt Burden Ratio (DBR) — your total monthly EMIs across all loans cannot exceed 40–50% of your gross salary.
| Gross Monthly Salary | Max Monthly EMI (40% DBR) | Max Loan at 20%, 20 yrs |
|---|---|---|
| PKR 60,000 | PKR 24,000 | ~PKR 14.4 lac |
| PKR 100,000 | PKR 40,000 | ~PKR 24 lac |
| PKR 150,000 | PKR 60,000 | ~PKR 36 lac |
| PKR 200,000 | PKR 80,000 | ~PKR 48 lac |
| PKR 300,000 | PKR 120,000 | ~PKR 72 lac |
PM's Own Home Program — 5% Mark-up (Budget 2026-27)
Budget 2026-27 launched the PM's Own Home Program — subsidised home finance at only 5% mark-up per year for low and middle-income first-time buyers. At 5% vs 20% on a PKR 30 lac loan over 20 years: EMI drops from PKR 57,900 to just PKR 19,800 per month, and total interest falls from PKR 109 lac to PKR 17.5 lac — a saving of over PKR 91 lac. Check eligibility through SBP's HBFC and approved partner banks.
Frequently Asked Questions — EMI & Loan Calculator Pakistan
EMI (Equated Monthly Installment) is the fixed monthly payment to repay a loan. The formula is: EMI = [P × r × (1+r)^n] / [(1+r)^n – 1] where P = principal loan amount, r = monthly interest rate (annual rate ÷ 12), n = total months. For example, a PKR 1,000,000 loan at 18% annual interest for 5 years gives an EMI of approximately PKR 25,393/month.
As of 2025, following SBP's policy rate cuts, bank lending rates in Pakistan typically range from 16% to 22% per annum depending on the loan type. Personal loans: 19–22% | Car loans: 16–19% | Home loans (HBL, UBL, etc.): 15–18% | SME loans: 18–22%. Rates vary by bank, your credit history, and whether the loan is secured or unsecured. Always compare rates from at least 3 banks before committing.
Reducing balance (used by all formal bank loans) calculates interest on the outstanding principal each month — so your interest charge decreases as you repay. Flat rate (sometimes used by informal lenders) calculates interest on the original principal for the full term — making the effective rate roughly double the stated rate. All banks in Pakistan regulated by SBP use the reducing balance method, which this calculator uses.
An amortization schedule shows exactly how much of each monthly EMI goes toward interest vs principal. In the early months, most of your payment is interest — for a 5-year loan at 18%, roughly 75% of your first EMI is interest. By the final year, most goes to principal. This helps you understand the true cost of borrowing and plan early repayment — paying one extra EMI per year can cut months off your loan.
Missing an EMI typically triggers: a late payment penalty (usually 1–3% of the overdue amount); the missed payment may be reported to eCIB (Electronic Credit Information Bureau), damaging your credit history; after 3 missed payments, the loan is classified as Non-Performing and the bank can initiate recovery proceedings. Always contact your bank before missing a payment — most banks offer restructuring or deferment options.
Shorter tenure = higher monthly EMI but much lower total interest paid. Longer tenure = lower monthly EMI but you pay significantly more in total interest. For example, PKR 2,000,000 at 18% over 3 years: EMI = PKR 72,316, total interest = PKR 603,376. Same loan over 7 years: EMI = PKR 40,195, total interest = PKR 1,376,280. The longer tenure costs PKR 772,904 extra in interest. Choose the shortest tenure your monthly budget can comfortably handle.
Being an active tax filer improves your loan eligibility significantly. Banks prefer filers because it demonstrates verifiable income. Some government schemes — like MERA PAKISTAN MERA GHAR (subsidized home loans) — require you to be a verified filer. Additionally, salary certificate and tax return documents are typically required for any formal bank loan above PKR 500,000. Filing your taxes genuinely expands your access to formal credit.
📚 Related Tools & Guides
Loan Type Comparison — Pakistan 2026
| Loan Type | Typical Rate 2026 | Typical Tenor | Security Required |
|---|---|---|---|
| Home Loan (conventional) | 18%–22% | 5–25 years | Property mortgage |
| Islamic Home Finance (Musharaka) | 18%–21% | 5–25 years | Property mortgage |
| PM Own Home Scheme | 5% (subsidised) | 10–20 years | Property mortgage |
| Car Loan (conventional) | 20%–25% | 3–7 years | Vehicle hypothecation |
| Islamic Car Finance (Murabaha) | 19%–24% | 3–7 years | Vehicle |
| Personal Loan | 25%–36% | 1–5 years | None (unsecured) |
| SME Business Loan | 20%–28% | 1–7 years | Business assets / guarantor |
Understanding Your Amortization Schedule
An amortization schedule shows the month-by-month split of your EMI between interest and principal. In the early months, most of your payment is interest. Example — PKR 20 lac at 18% for 10 years (EMI = PKR 35,960):
| Month | Opening Balance | EMI | Interest | Principal | Closing Balance |
|---|---|---|---|---|---|
| 1 | 2,000,000 | 35,960 | 30,000 | 5,960 | 1,994,040 |
| 12 | ~1,930,000 | 35,960 | ~28,950 | ~7,010 | ~1,923,000 |
| 60 | ~1,480,000 | 35,960 | ~22,200 | ~13,760 | ~1,466,000 |
| 120 | ~36,000 | 35,960 | ~540 | ~35,420 | 0 |
5 Ways to Reduce Your EMI Burden
- Increase down payment: Every extra rupee you pay upfront saves multiple rupees in interest over the tenure. Increase down payment from 20% to 30% where possible.
- Make extra payments: Even one extra EMI per year reduces a 20-year loan to approximately 17 years and saves lakhs in interest.
- Negotiate the rate: If you have good credit history, salary account with the same bank, or government employment, negotiate a lower spread over KIBOR.
- Compare multiple banks: Get pre-approval quotes from at least 3 banks. Rates vary by 2–3% between banks for the same borrower profile.
- Use PM's Own Home Scheme: If you qualify, the 5% subsidised rate saves enormous amounts — check eligibility before taking a market-rate loan.
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