How this calculation works
Each future monthly payment is discounted back to the start of the loan. Adding those present values gives the principal compatible with that payment under a fixed rate. The annual nominal rate is divided by 12.
Principal = payment × [1 − (1+r)⁻ⁿ] ÷ r; at r = 0, principal = payment × nA worked example
A ₹10,000 monthly payment for 60 months at 12% nominal annual interest supports approximately ₹4,49,550.38 of principal.
Good to know
Equal end-of-month payments and a constant rate. No lender approval, credit assessment, fees, insurance, balloon payment or down payment. This is a payment-based principal estimate; it does not decide a safe personal budget.
Reference: CFPB: loan amount, rate and term affect the monthly payment (opens in a new tab) ↗
Work backward from a monthly payment
An EMI calculator starts with a loan amount and finds the payment. This page starts with a payment budget and finds the principal it can service. It is useful for testing how the same monthly limit changes with a rate or term.
For ₹10,000 per month over 60 months at 12% nominal annual interest, the modeled principal is about ₹4,49,550.38. The scheduled payments total ₹6,00,000; the difference is interest under this fixed-rate model.
At zero interest, there is no discounting: ₹10,000 for 60 months supports ₹6,00,000 of principal. Enter zero explicitly when comparing that baseline with an interest-bearing loan.
A longer term changes cost as well as principal
Holding the payment and rate constant, a longer term supports a larger principal. It also creates more scheduled payments. Compare the total interest, not just the larger amount that appears at the top of the result.
For a purchase, principal and purchase price are different quantities. A down payment may increase the price you can fund, while fees, taxes or insurance may require additional cash or occupy part of the payment budget. None are silently included here.
Your chosen monthly limit should come from an independent view of income, living costs and reserves. The calculator does not assess that budget, read a credit file or indicate lender approval. If the rate can change, compare additional scenarios rather than treating a fixed-rate result as a complete future repayment plan.
A few questions, answered
Why is this called a payment budget calculator?
The result is the principal supported mathematically by the payment you enter. It does not decide what payment is personally affordable or what a lender will offer.
When is the first payment assumed?
One month after borrowing, followed by equal payments at the end of each month. Advance payments or irregular dates need a different model.
Can I include fees?
There is no separate fee input. If a fee is financed, it uses part of the resulting principal; if paid upfront, it needs separate cash. A full borrowing-cost comparison should model the actual offer.