FINANCE CALCULATOR
What the recovery costs each month.
An employee loan is only as manageable as its instalment. This shows the EMI, the total interest and what the employee ultimately repays.
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Fields are pre-filled with typical values — type your own or drag the sliders, and everything recalculates instantly. Nothing is sent to a server.
Calculated on FY 2025-26 statutory rates. Indicative only — confirm against current notifications before filing.
Monthly EMI deduction
₹9,045
Total payable
₹2,17,091
Total interest
₹17,091
Tenure
24
Principal against interest over the full tenure
Full breakdown
Step-by-step calculation
HOW IT WORKS
The formula used
The standard EMI formula, applied to the loan principal and tenure.
Annual rate ÷ 12 ÷ 100P × r × (1+r)ⁿ ÷ ((1+r)ⁿ − 1)EMI × number of monthsTotal repayment − principalUNDERSTANDING IT
About the loan emi deduction calculator
Employee loans and salary advances are common in Indian organisations, particularly for medical needs, education and housing deposits. Recovering them through payroll is far more reliable than expecting separate repayment, but it needs a defined instalment schedule.
The equated monthly instalment keeps the repayment constant across the tenure while the split between principal and interest shifts over time. Early instalments are interest-heavy; later ones repay mostly principal.
Where an employer lends interest-free or below market rate, there may be a perquisite tax implication for the employee. That is a separate consideration from the recovery schedule itself.
Worked example
Take a loan of ₹2,00,000 at 8% annual interest over 24 months.
The monthly interest rate is 0.67%. Applying the EMI formula gives a monthly instalment of approximately ₹9,046. Over 24 months the employee repays about ₹2,17,100, of which roughly ₹17,100 is interest.
WHY IT HELPS
What this calculator is good for
Set an affordable instalment
Check the EMI against take-home before approving the loan.
See the interest cost
Total interest over the tenure is often larger than expected.
Plan the recovery period
Compare tenures to balance instalment size against total interest.
WATCH OUT
Common mistakes
These are the errors that most often produce a wrong number.
Approving an EMI that leaves insufficient take-home after all other deductions.
Tracking loan balances outside payroll, which causes recovery to drift.
Failing to recover the outstanding balance at exit through final settlement.
Overlooking the perquisite implication of an interest-free or concessional loan.
HR TIPS
Practical guidance
Cap EMI as a share of take-home
A policy ceiling prevents recovery from creating hardship.
Recover through payroll
Automatic deduction is far more reliable than separate repayment.
Close out at exit
The outstanding balance should flow into full and final settlement.
QUESTIONS
Loan EMI Deduction Calculator — frequently asked
Using the formula P × r × (1+r)ⁿ ÷ ((1+r)ⁿ − 1), where P is principal, r is the monthly interest rate and n is the tenure in months.
The outstanding balance is normally recovered through full and final settlement against dues payable, with any shortfall handled per policy.
A concessional or interest-free loan from an employer can attract perquisite valuation for tax purposes, subject to prescribed exemptions and thresholds.
Results are indicative and computed on FY 2025-26statutory rates using conventional salary-structure assumptions. Your actual figures depend on your employer’s structure, your state and your declarations. Confirm against current notifications before relying on these numbers for filing.
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