Reducing-balance EMI
Each month you pay the same installment. Part of it is interest on the remaining principal; the rest reduces the loan. That is why early EMIs are interest-heavy. This calculator does not add processing fees, insurance or a flat-rate (add-on) method some shops still quote.
৳5,00,000 at 12% for 5 years
Monthly rate 1%. EMI ≈ ৳11,122, 60 payments ≈ ৳6,67,333, interest ≈ ৳1,67,333. The first month is mostly interest (~৳5,000); later months flip toward principal. A shop “flat 12%” on the same loan is ৳5,00,000 × 12% × 5 ÷ 60 = ৳10,000 interest-only plus principal/60 — a different product. Use the bank’s reducing-balance letter, not the poster rate.
When this does not apply
Islamic diminishing-musharaka, balloon payments, or a moratorium month. Processing fees and insurance sit outside EMI. A ৳10,000 processing fee on the ৳5 lakh example is cash now, not part of the ৳11,122 installment. For take-home pay after tax, use income tax or payscale 2026.