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| 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 |
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
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.