Interest Rate Calculator
Find the interest rate implied by any loan's amount, EMI, and tenure.
- Free to use
- No registration required
- Works on all devices
- Last updated
- 13-09-2026
Your result
19.19%
Implied annual interest rate
AI explanation
Formula
Solves for the rate r such that P = EMI × [(1+r)^n − 1] / [r × (1+r)^n], via bisectionWorked example
₹5L loan, ₹15,000 EMI, 4 years
| Field | Value |
|---|---|
| Loan amount | ₹5,00,000 |
| Monthly EMI | ₹15,000 |
| Tenure | 48 |
| Implied annual interest rate | 19.19 |
Assumptions
- Works for any loan type — personal, car, or other installment loan — that uses standard reducing-balance amortization.
Frequently asked questions
Why would I need to calculate an implied interest rate?
Useful for verifying a lender's quoted rate against the actual EMI offered, or for comparing loan offers presented only as an EMI figure per lakh borrowed.
How accurate is a bisection-solved rate compared to the lender's stated rate?
Very accurate for standard reducing-balance loans — the main source of mismatch is if the lender uses a different amortization convention or includes fees not reflected in the EMI.
What if my inputs don't produce a valid rate?
The EMI × tenure must exceed the loan principal for a positive interest rate to exist — if not, double-check your inputs.
Why does this use bisection instead of a direct formula?
There's no closed-form algebraic solution for the rate in the EMI formula — bisection narrows in on the answer by repeatedly testing rates until the implied loan amount matches your input.
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Sources
- Master Circular on customer service and fair practices code — Reserve Bank of India. Effective 01-07-2015, checked 13-09-2026.
This calculator provides a general estimate only and does not constitute financial advice.
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