Banks and finance companies in Nepal repay most loans in equal monthly instalments (EMI) on a reducing balance: each payment covers that month's interest, and the rest brings the loan down. Enter the amount, the yearly rate and the term to see the EMI, how much of what you repay is interest, and the balance at the end of each year.
How the EMI is worked out
The formula above gives a payment that stays the same every month and clears the loan exactly on the last one. Early payments are mostly interest, because the balance is high; later ones are mostly principal. The year-by-year schedule shows that shift.
A longer term lowers the EMI but raises the total interest, often by a lot. Compare 5 and 10 years on the same amount before choosing.
When the rate changes
Most bank loans in Nepal have a floating rate — the bank's base rate plus a premium — so the rate, and with it the EMI or the term, can change during the loan. This calculator assumes one rate throughout; re-run it with the new rate when the bank revises it, using the balance outstanding.
Fees (service charge, valuation, insurance) are not part of the EMI. Ask the lender for them separately when comparing offers.
Common questions
How is EMI calculated?
EMI = P × r × (1+r)^n ÷ ((1+r)^n − 1), with P the loan amount, r the monthly rate (yearly % ÷ 1200) and n the number of months.
What is the EMI on a 10 lakh loan?
At 12% a year: about Rs 22,244 a month over 5 years, or Rs 14,347 over 10 years. Change the rate and term above for your own figures.
Does a longer term save money?
No — it lowers the monthly payment but increases the total interest, because the balance stays high for longer.
Is the rate in this calculator yearly or monthly?
Yearly, as banks quote it. The calculator divides it by 12 for the monthly rate.
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