An EMI (Equated Monthly Instalment) is the fixed monthly payment on a loan — it covers both interest and principal in a proportion that shifts over time. This calculator shows your monthly EMI, total amount paid over the loan term, and total interest cost for any Pakistani bank loan or financing arrangement.
How to use: Enter the loan amount, annual markup/interest rate, and loan tenure in years. For Islamic financing (Murabaha or Diminishing Musharakah), the monthly payment structure is similar — use the effective annual rate your bank quoted for the monthly instalment figure.
Calculate your monthly loan instalment (EMI) and total cost of borrowing for any loan amount, markup rate, and tenure.
Uses standard reducing balance EMI formula. Islamic finance (Murabaha, Diminishing Musharakah) has similar monthly payments with different structures.
Total Interest — The Number Banks Don't Advertise
The total interest (total paid minus principal) reveals the true cost of borrowing. On a 5-year loan at 22% markup, total interest often exceeds the original principal — you pay back more than twice what you borrowed. This is why early repayment (if your loan terms allow without penalty) has a disproportionate impact on total cost: it eliminates all future interest on the repaid amount.
Frequently Asked Questions
As of mid-2026, Pakistan's policy rate remains elevated — commercial bank home loan rates are typically 18–24% per annum depending on the bank and loan type. Islamic financing rates track similar levels through Diminishing Musharakah pricing. Government subsidised schemes (PHSC's Mera Pakistan Mera Ghar) offer below-market rates for eligible applicants.
Reducing balance (used by banks) calculates interest on the outstanding principal — as you repay, the interest base reduces. Flat rate (used by some informal lenders) charges interest on the original principal throughout. On Rs. 1,000,000 for 3 years: 20% flat rate = Rs. 600,000 interest; 20% reducing balance ≈ Rs. 330,000 interest. Always clarify which method applies.
Most bank loans in Pakistan allow prepayment with a prepayment penalty (typically 1–3% of the prepaid amount). Some Islamic financing products have no prepayment penalty. If you have surplus cash, prepaying a Pakistani bank loan at 22% markup delivers a guaranteed 22% after-tax return — better than most savings products.
Most Pakistani bank loans use floating rates tied to KIBOR (Karachi Interbank Offered Rate), which tracks the SBP policy rate. When SBP cuts rates, your floating-rate loan EMI (or tenure) adjusts downward at the next reset date — typically quarterly or annually per the loan agreement.