# Loan and EMI calculator documentation

Inputs, formulas, assumptions and API/MCP examples for the loan and emi calculator. Reproduce a calculation and cite its sources.

Canonical calculator: https://klarfort.com/tools/loan-calculator/
Content updated: 2026-09-07
Assumptions reviewed: 2026-09-07

## Overview
Estimate the monthly payment and total cost of a loan from the amount borrowed, annual rate and term. EMI means equated monthly installment, the scheduled payment before any extra payments.

Compare reducing-balance interest with a flat finance charge, then see how monthly overpayments or a one-time payment change the repayment schedule.

## How to use
1. Choose one currency and enter the amount borrowed, annual interest rate and loan term in months.
2. Select reducing or flat interest to match the loan calculation you want to model.
3. Enter any extra monthly payment, one-time payment and its month, plus an upfront origination fee.
4. Calculate, then compare the scheduled payment, total interest, payoff month and downloadable schedule.

## Understanding the result
The headline payment excludes extra payments. The schedule includes them and may finish with a smaller final payment. Total paid includes the upfront origination fee.

Interest saved compares the selected interest method with the same loan without extra payments. Flat finance charges remain payable in full in this model, even if the balance is cleared early.

## Questions
### What is the difference between flat and reducing interest?
Reducing interest is charged on the outstanding principal each month. Flat interest is calculated from the original principal for the whole term. The same quoted percentage therefore does not produce the same cost.

### Does an extra payment reduce my scheduled monthly payment?
The calculator keeps the scheduled payment and uses extra payments to clear the balance sooner. It does not model a lender recalculating the installment after an overpayment.

### Are loan fees and early-settlement rebates included?
The entered origination fee is paid upfront and included in total paid. No early-settlement rebate is assumed for a flat loan, and other charges are excluded unless represented by an available input.

## Default worked example
Scheduled monthly payment: 386.66 USD. Scheduled payment before extra payments; the schedule includes the final partial payment. Assumptions as of 2026-09-07.

## Formula
Reducing payment = P r / (1 - (1+r)^(-n)); flat finance charge = P APR n / 12.

- APR is nominal and divided by 12 for reducing-balance interest.
- Payments occur at month end; interest is retained at full precision until display.
- Flat finance charges are owed in full with no early-settlement rebate; each payment allocates the original principal-to-charge ratio.
- The origination fee is paid upfront and is not financed.

## Inputs
- currency: Currency; default "USD"
- principal: Loan principal; default 20000
- annualRate: Annual interest rate (%); default 6
- months: Duration in months; default 60
- rateType: Interest calculation; default "reducing"
- extraMonthly: Extra monthly payment; default 0
- lumpSum: One-time extra payment; default 0
- lumpSumMonth: Month of one-time payment; default 1
- originationFee: Upfront origination fee; default 0

## Interfaces
Input schema: https://klarfort.com/tools/loan-calculator/schema.json
Worked request and response: https://klarfort.com/tools/loan-calculator/examples.json
Public table: https://klarfort.com/tools/loan-calculator/table.json
JSON API: POST https://klarfort.com/tools/api/v1/loan-calculator
MCP endpoint: POST https://klarfort.com/tools/mcp
MCP tool name: loan-calculator

## JSON request body
```json
{
  "currency": "USD",
  "principal": 20000,
  "annualRate": 6,
  "months": 60,
  "rateType": "reducing",
  "extraMonthly": 0,
  "lumpSum": 0,
  "lumpSumMonth": 1,
  "originationFee": 0
}
```

## Usage and credit
Free for personal, commercial and any other lawful use with credit to KlarFort at https://klarfort.com/. Third-party data terms still apply.

Computed with KlarFort Calculators, https://klarfort.com/

Place a visible credit near the reused material or in the credits for your work or integration. One clear credit per work or integration is sufficient; no separate credit per API request is required. The credit_url field contains the homepage. The citation_url field is an optional calculator reference. Full permission: https://klarfort.com/tools/docs/license/

## Sources
KlarFort calculator methodology: https://klarfort.com/tools/methodology/ (1)