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Calculate your monthly loan installments (EMI), total interest payable, generate monthly and yearly loan amortization schedules, and evaluate prepayment interest savings with interactive sliders.
Complete repayment breakdown showing monthly and annual principal, interest, and closing balances.
| Year | Opening Balance | EMI Paid | Principal Paid | Interest Paid | Closing Balance |
|---|
An Equated Monthly Installment (EMI) is a fixed payment amount made by a borrower to a financial lender on a designated calendar date each calendar month. EMIs are designed to amortize or fully settle a loan over a predefined tenure, combining both repayment of the original principal amount borrowed and the accrued interest charges levied by the lending institution.
In India, commercial banks (such as SBI, HDFC, ICICI, Axis Bank, and Kotak Mahindra) and Non-Banking Financial Companies (NBFCs) compute home, car, and personal loan EMIs using the Reducing-Balance Method (also known as the diminishing balance method). Under this mathematical framework, interest is calculated solely on the outstanding principal balance remaining at the start of each month, rather than on the initial lump-sum loan amount.
The standard mathematical equation used universally by banking institutions to compute monthly loan installments is:
Where the formula parameters represent the following financial values:
r = (8.5 / 12) / 100 = 0.0070833.
n = 20 × 12 = 240 monthly installments.
Let us calculate the exact monthly installment for a ₹30,00,000 home loan at an annual floating interest rate of 8.5% for a 20-year term:
Notice that during the 20-year loan lifespan, total interest charges (₹32.48 Lakh) actually exceed the original principal borrowed (₹30 Lakh). This occurs because early monthly installments predominantly service interest charges, with only a small fraction reducing the principal.
| Loan Category | Typical Interest Rate (p.a.) | Standard Tenure | Processing Fees |
|---|---|---|---|
| Home Loan | 8.35% – 9.50% | 15 – 30 Years | 0.25% – 0.50% (often capped at ₹10,000) |
| Car Loan (New Vehicle) | 8.75% – 10.50% | 3 – 7 Years | 0.50% – 1.00% of loan amount |
| Personal Loan (Unsecured) | 10.50% – 16.00% | 1 – 5 Years | 1.00% – 2.50% + GST |
| Education Loan | 9.00% – 12.00% | 5 – 15 Years | Nil to 1.00% (moratorium benefits available) |
Making partial prepayments (part-payments) directly reduces the outstanding principal balance. Because subsequent monthly interest is computed strictly on the reduced balance, even small extra contributions create a compounding savings effect.
For instance, on the ₹30 Lakh 20-year home loan mentioned above, paying an extra ₹2,000 per month into your EMI saves approximately ₹6,13,000 in interest and closes your loan 38 months (over 3 years) earlier. Under Reserve Bank of India (RBI) regulations, banks cannot levy foreclosure or prepayment penalties on individual floating-rate home loans.
Under a reducing-balance loan, interest is calculated each month only on the remaining unpaid principal. As you repay principal, monthly interest charges decline. In a flat-rate loan, interest is calculated on the entire initial principal across the whole tenure, making flat rates significantly more expensive even if the quoted nominal percentage looks lower.
Yes. If you make lump-sum prepayments or if your bank alters floating interest rates (due to RBI repo rate revisions), you can instruct your lender either to reduce your monthly EMI amount while keeping tenure constant, or reduce your overall tenure while keeping your monthly EMI constant.
A longer tenure (e.g., 30 years vs 15 years) lowers your monthly EMI, making installments easier on your monthly budget. However, a longer tenure drastically increases the total cumulative interest paid over time. Opting for the shortest tenure you can comfortably afford minimizes total financing costs.
Under the Old Tax Regime in India, borrowers can claim deductions up to ₹1.5 Lakh per financial year on principal repayment under Section 80C, and deductions up to ₹2 Lakh per financial year on interest payments under Section 24(b) for a self-occupied residential property.
Yes. Click the Download CSV button above the amortization table to export the full monthly or annual breakdown into a spreadsheet-compatible CSV file that opens in Microsoft Excel, Google Sheets, or LibreOffice Calc.