Work out loan interest rate from emi instantly with clear inputs, formula shown and shareable results.
The EMI formula cannot be rearranged for the rate in closed form, so the rate is found numerically. Bisection narrows the monthly rate until the computed instalment matches the EMI you were quoted, exposing the true cost behind the payment.
Solve for r
Find r such that P·r/(1-(1+r)^-n) = EMI, then annual rate = 12r
Figures are estimates. Lenders apply their own rounding, fees and eligibility rules, and rates change. This is not financial advice — confirm the numbers with your lender.
Lenders sometimes quote only the instalment. Backing out the rate lets you compare the offer with a normal rate quote.
It is the nominal annual rate. Add processing fees and insurance to get a true APR, which will be higher.