How do I find the interest rate if I know the EMI?

Enter the loan amount, monthly EMI, and loan term into the calculator. It uses Newton's method to iteratively find the interest rate that produces the given EMI from the standard amortization formula.

What is the difference between flat rate and reducing rate?

A flat rate calculates interest on the full original loan amount for the entire term. A reducing (diminishing) rate calculates interest on the outstanding balance, which decreases with each payment. This calculator finds the reducing rate, which is the standard used in amortising loans.

Why might my calculated rate differ from the quoted rate?

Differences can occur due to processing fees, insurance charges, or if the lender uses a flat rate vs reducing rate. The rate this calculator finds is the effective reducing balance rate based on your actual EMI payments.

Interest Rate Calculator — Find Rate from Loan Details

Loan Details

Your Results

Annual Interest Rate 0%

Monthly Interest Rate 0%

Total Payment 0

Total Interest Paid 0

Interest-to-Principal Ratio 0%

Equivalent Flat Rate 0%

Year-by-Year Breakdown

Year	Opening Balance	Annual Payment	Principal Paid	Interest Paid	Closing Balance

How It Works

This calculator uses Newton's method (an iterative numerical technique) to reverse-calculate the interest rate. Given a loan amount P, monthly payment M, and number of months n, it finds the rate r such that:

M = P × r × (1 + r)ⁿ / ((1 + r)ⁿ − 1)

Where r = monthly interest rate. Annual rate = r × 12 × 100%.

When to Use This Calculator

Verify lender claims: Check if the quoted interest rate matches your actual EMI.
Compare offers: Convert flat rates to effective reducing rates for accurate comparison.
Back-calculate: If you know the EMI but forgot the rate, find it instantly.
Existing loans: Determine the effective rate on a loan you're already paying.

Flat Rate vs Reducing Rate

Flat Rate: Interest calculated on original loan amount throughout. Total Interest = P × flat_rate × years.
Reducing Rate: Interest charged on decreasing outstanding balance. Standard for amortising loans.
A flat rate of X% roughly equals a reducing rate of approximately 1.8× to 2× X%.

How to Use

Loan Amount: The total amount borrowed.
Monthly Payment: The EMI you are paying or quoted.
Loan Term: Duration in years.
The calculator finds the exact annual reducing-balance interest rate.

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