EMI Truth Calculator India: The Real Yearly Rate Behind a Quoted EMI

Start test →

A shop says "no-cost EMI". A lender says "9% interest". A dealer says "only 12% flat". Each sounds simple, and each leaves out something you will still pay. By the end of this guide you will know how to type any of these quotes into EMI Truth, what every box means, and how to read the yearly rate, the cost of credit and the working that come back.

What does EMI Truth do?

EMI Truth answers one question, in the page's own words: what does this EMI really cost, once every fee and condition is counted? You type what the lender or shop quoted. The page shows:

• the yearly rate with every charge in it,
• the rupees the credit costs, line by line,
• what would change the answer, and
• the working, step by step.

It runs in your browser and is not a lender or advice.

Which of the three quotes do I pick?

The first card is "Kind of quote". There are three choices, and the labels are close to what you will hear:

1. I was quoted a reducing-balance loan. You borrow an amount, pay a rate on what you still owe, and repay in equal monthly instalments. Most bank loans are quoted this way.
2. I was quoted a flat rate. The interest is worked on the full amount for the whole term, whatever you have already repaid.
3. I was quoted an EMI plan (including no-cost EMI). You are buying something with a cash price, and the seller offers instalments.

If you are unsure, look at which numbers your offer gives. A rate and a tenure point to the first. The words "flat" or "per month" point to the second. A cash price and a monthly instalment point to the third.

Card 2: What the quote said

This card changes with the quote you picked.

Reducing-balance loan

• Loan amount you receive (Rs). The money actually transferred to your account or paid to the seller. If a fee is deducted before the money reaches you, type the amount you receive, not the sanctioned amount.
• Quoted interest rate (% a year). The annual rate in the quote or sanction letter.
• Tenure (months). The number of monthly instalments, from 1 to 360.
• Insurance or extras added to loan (Rs, optional). Charges added to the loan balance that you repay with interest.

Flat rate

• Loan amount (Rs). The principal under the flat quote.
• Flat rate period. Per year or per month, as the quote states it. This matters a lot. A flat 1% per month is not a flat 1% per year.
• Quoted flat rate (%). The flat rate itself.
• Tenure (months) and Insurance or extras added to loan, as above.

EMI plan

• Cash price today (Rs). What you would pay right now in cash without the EMI scheme.
• Down payment on day 0 (Rs, optional). The part paid today. It must be less than the cash price.
• EMI each month (Rs). The instalment the seller quoted.
• Number of EMIs (months). From 1 to 360.
• Interest shown on statement, if any (Rs, optional). Use it if your bill breaks out interest separately.

Type amounts the way you say them. Commas, spaces and a leading "Rs" are fine, and the box groups digits Indian-style as you type. Amounts go up to the paisa. A fraction of a paisa is refused.

Card 3: What the quote left out

This card is optional, but it is the reason the tool exists. Whatever the quote did not include goes here.

• Processing fee type and the fee. Choose "Fee as rupee amount" or "Fee as percentage (%)", then type it.
• GST on processing fee (%). It opens at 18, which the page calls the default shown here. Change it if your fee is charged at a different rate.
• Upfront extras paid out of pocket (Rs). Documentation charges, stamp duty or anything else paid on day 0.
• GST on interest. Three choices: "I do not know", "I read it on my statement: Rs" (type the rupee amount) and "I want to try a rate: %". The page labels this as disputed between sources. If you pick "I do not know", the answer for an EMI plan shows both readings side by side, and the page says the 18% it uses there is an illustration, not a quote.

Card 4 is an optional label for the quote, such as "Bank offer". It stays on your device and is not put in the link, the share card or the PDF.

The button Use example numbers fills the boxes with a sample for the quote you picked, so you can see a result before you type your own. The page marks them as example numbers to change, not as a quote.

Type this: a 12% flat loan of Rs 1,00,000 for 12 months

Pick "I was quoted a flat rate". Type Rs 1,00,000 as the loan amount, set the period to "Per year", type 12 as the flat rate and 12 as the tenure. Leave card 3 empty.

These figures come from running the EMI Truth engine on that input.

What the page shows	Result
EMI worked out from the quote	Rs 9,333.33
Total paid in instalments	Rs 1,11,999.96
Interest in the instalments	Rs 11,999.96
Cost of credit	Rs 11,999.96
Quoted rate	12.00%
True yearly rate	21.46%
Difference	9.46%
Compounded yearly rate	23.70%

The headline reads: "Under these numbers the loan costs 21.46% a year in all, against the 12.00% you were quoted."

Why so far apart? You pay interest on the full Rs 1,00,000 for all 12 months, but from the second month you owe less than that. The page works out the yearly rate that matches the actual instalments, and that rate is 21.46%.

Now add what the quote left out. Set the fee type to percentage and type 1, leave GST on the processing fee at 18, and type Rs 500 as upfront extras. The engine gives:

What the page shows	Result
Processing fee	Rs 1,000.00
GST on the fee	Rs 180.00
Upfront extras	Rs 500.00
Cost of credit	Rs 13,679.96
Total paid overall	Rs 1,13,679.96
True yearly rate	24.76%
Compounded yearly rate	27.77%

The rate the instalments alone imply stays at 21.46%. The extra 3.30 points come entirely from the fee, its GST and the upfront extras. The "What would change this answer" panel confirms it: remove the fees and the yearly rate returns to 21.46%, and the cost of credit falls by Rs 1,680.00.

Type this: a phone at Rs 48,000 on "no-cost EMI"

Pick "I was quoted an EMI plan". Type Rs 48,000 as the cash price today, leave the down payment empty, type Rs 8,333 as the EMI each month and 6 as the number of EMIs. In card 3, choose "Fee as rupee amount" and type Rs 199. Leave GST on interest at "I do not know".

The headline reads: "Under these numbers the EMI route costs Rs 2,232.82 more than paying the cash price today."

What the page shows	Result
Total paid in instalments	Rs 49,998.00
Instalments above the cash price	Rs 1,998.00
Processing fee	Rs 199.00
GST on the fee	Rs 35.82
Cost of credit (no GST on interest)	Rs 2,232.82
Yearly rate (no GST on interest)	15.85%
Compounded yearly rate	17.06%
Cost of credit (GST on interest at a rate)	Rs 2,592.46
Yearly rate (GST on interest at a rate)	18.38%

Notice what happened. Six EMIs of Rs 8,333 add up to Rs 49,998, which is Rs 1,998 more than the Rs 48,000 cash price. If the plan was sold as no-cost, it still costs more than the cash price, even before the processing fee. The page shows the two readings of GST on interest, the line "Between 15.85% and 18.38% a year, depending on the GST on interest", and a note that under these numbers the plan labelled no-cost costs more than the cash price.

If your statement shows the GST on interest, choose "I read it on my statement" and type the rupee amount. The page then uses your figure instead of two readings. If you choose "I want to try a rate" and type 18, it shows only that reading: Rs 2,592.46 more than the cash price, and 18.38% a year.

The rate the quote itself implies, with no fee, is 14.13% a year. That is the number to compare with the figure the page shows once fees are in.

One more case, for a reducing-balance loan: Rs 10,00,000 at 9% for 60 months with a 1% processing fee and the default 18% GST on it. The EMI is Rs 20,758.36, the fee and its GST are Rs 10,000.00 and Rs 1,800.00, and the true yearly rate is 9.51% against the 9.00% quoted. The cost of credit is Rs 2,57,301.23.

How do I read the result?

The answer area has a few parts. Here is what each one means.

The headline sentence. For a loan, it gives the yearly rate in all against the rate you were quoted. For an EMI plan, it says whether the EMI route costs more, the same or less than the cash price, and by how many rupees. The page words it as "Under these numbers", because that is all it knows.

Quoted versus true rate. For loans, a small scale places the quoted rate and the true rate on one line, so the gap is visible. When the two are close, the page's two characters say so. When fees push the true rate up, they tell you to look closer.

The yearly rate. The page notes that the yearly rate is the monthly rate times 12, and that the compounded yearly rate sits beside it. Use the first for comparing with a quoted rate. The compounded figure shows what the same cash flows come to if you compound the monthly rate across a year.

Cost of credit. This is total paid overall, less the amount you receive (and less any down payment, for an EMI plan). It is broken into interest in the instalments, extras added to the loan, the processing fee, GST on the fee, upfront extras and GST on interest.

Sensitivity. The panel "What would change this answer" re-runs the engine with one change at a time: fees removed, the rate up by 1%, or the tenure 12 months longer. Each line gives the new yearly rate and how the cost of credit moves. The tenure line is worth a look. In the flat example above, running the loan 12 months longer moves the yearly rate from 21.46% to 21.57% and raises the cost of credit by Rs 12,000.12.

The working. Open it to see every formula, the values put in and the result for each step. Pointing at a figure lights up the step it came from.

Share and save. You can copy a link to your numbers, download a PDF once an answer is calculated, or make a share card. The card hides the amounts until you ask for them. Reset clears the form and Undo brings it back.

What does the tool not do?

EMI Truth is strict about its limits. The page lists what it does not model:

• prepayment and foreclosure charges, and part-payments,
• floating-rate resets, moratorium, and bullet or balloon loans,
• income tax effects, such as a home-loan deduction or business use,
• cashback or reward points that arrive later,
• credit card revolving interest, and bank offers that depend on a card,
• insurance value, and inflation.

It also does not compare paying cash with borrowing and investing the difference. That is a different question, and the page points you to the Cash vs Loan calculator. Our guide on paying upfront or taking an EMI walks through that tool. If your question is how big a down payment should be, see how much down payment to put on a car loan.

The page also reminds you that banks round instalments in different ways, so your lender's own schedule decides the final figure.

Everything here is arithmetic on your numbers. It is not advice to take or avoid a loan. Not reviewed by a Chartered Accountant. If a result looks wrong, use the "Report something wrong" button in the page footer.

A short routine for any EMI offer

1. Get the offer in writing: amount received, rate, tenure, every fee, and whether GST is charged on interest.
2. Pick the matching kind of quote and type it as written, with the fee, its GST and any upfront extras in card 3.
3. Read the headline, then the gap between the quoted and the true rate.

Last reviewed: October 2026. For other tools, see the HeyArtha guides and the calculators hub. How HeyArtha's tools are built is on the Methodology page. Planning for a rough patch while a loan runs? The Shock Test shows how long your savings last if your income stops, and its guide is below.

Next in series: Shock Test Calculator India: How Long Your Savings Last.

Think about the last EMI offer you were given: which charge in it did you not ask about until after you had signed?

Regulatory & Educational Disclaimer: The content on HeyArtha is published strictly for educational, career awareness, and personal reflection purposes. Nothing contained in this article constitutes financial, investment, legal, or taxation advice. We are not a SEBI-registered investment advisor or research analyst. Trading and investments in financial markets involve risk of capital loss. Always consult a certified professional before making financial commitments.