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Calculate exact monthly installments for Home, Car, and Personal loans. Simulate early prepayments, analyze interest ratios, and view year-by-year amortization.
Monthly EMI
Total Interest
Total Payment
You pay ₹2,60,112 in interest on a borrow amount of ₹10,00,000.
In your first year, 34.9% of all EMIs will go strictly toward interest service.
Tax Tip: Home buyers under the Old Regime can save up to ₹2L on interest (Sec 24b) and ₹1.5L on principal (Sec 80C) every year.
Tracking principal reduction and interest amortized over time
| Period | Principal Paid | Interest Paid | Total Payment | Ending Balance |
|---|---|---|---|---|
| Year 1 | ₹1,64,043 | ₹87,979 | ₹2,52,022 | ₹8,35,957 |
| Year 2 | ₹1,80,324 | ₹71,698 | ₹2,52,022 | ₹6,55,633 |
| Year 3 | ₹1,98,221 | ₹53,802 | ₹2,52,023 | ₹4,57,412 |
| Year 4 | ₹2,17,894 | ₹34,129 | ₹2,52,023 | ₹2,39,519 |
| Year 5 | ₹2,39,519 | ₹12,503 | ₹2,52,022 | ₹0 |
An Equated Monthly Installment (EMI) is the backbone of consumer lending in India. Whether you are taking a home loan from SBI, a car loan from HDFC, or a personal loan from ICICI, understanding how interest is front-loaded empowers you to save lakhs of rupees over the lifetime of your borrowing.
All Indian scheduled commercial banks follow the standard reducing-balance annuity formula:
In the initial 30% to 50% of your loan tenure, the lion's share of your EMI goes directly toward interest rather than principal reduction. By making small regular prepayments (such as 1 extra EMI every year or +₹2,000 every month), you chip directly away at the principal, preventing compound interest from accumulating.
Keep your monthly EMI constant while shortening the loan duration. This provides the highest mathematical savings in total interest.
Keep the original loan tenure while reducing your monthly commitment. This is ideal if you want to improve your monthly disposable cash flow.
EMI stands for Equated Monthly Installment. It is a fixed payment amount made by a borrower to a lender at a specified calendar date each month. Each EMI includes both principal repayment and interest charges, structured so that the loan balance reaches zero at the end of the tenure.
The standard formula for EMI calculation is: EMI = [P × R × (1+R)^N] / [(1+R)^N - 1], where P is Principal, R is monthly interest rate (annual rate / 12 / 100), and N is the total number of monthly installments.
When you make a partial prepayment, 100% of the prepayment goes directly towards reducing your outstanding principal balance. Because subsequent monthly interest is computed on a smaller principal, you can either drastically reduce your remaining tenure (saving lakhs in interest) or request your lender to lower your monthly EMI.
Under the Old Tax Regime in India: (1) Section 24(b) allows up to ₹2,00,000 deduction per financial year for interest paid on a self-occupied home loan. (2) Section 80C allows up to ₹1,50,000 deduction on the principal repayment component. Note: Tax deductions are not available under the default New Tax Regime (Section 115BAC).
For floating-rate loans linked to the External Benchmark Lending Rate (EBLR/repo rate), a repo rate hike increases your loan interest rate. By default, Indian banks keep your EMI constant and lengthen your loan tenure. If you want to keep your tenure unchanged, you can ask your bank to increase your monthly EMI instead.
Floating rates are typically 1% to 2.5% cheaper than fixed rates and carry zero prepayment penalties for individual borrowers under RBI rules. Fixed-rate loans offer certainty if interest rates are expected to rise significantly, but usually carry strict prepayment charges and lock-in periods.