EMI Calculator
EMI Calculator
Loan planning with reducing-balance amortization
Model any loan — home, auto, personal, or business — using the standard reducing-balance method followed by Indian banks and NBFCs. Adjust principal, interest rate, and tenure below to see your monthly EMI, total interest outgo, and a year-by-year amortization schedule.
Loan Inputs
Loan Amount
₹30,00,000
₹1 L₹2 Cr
Interest Rate (p.a.)
8.50%
5%20%
Tenure
20 years
1 yr30 yrs
Monthly EMI
₹26,035
payable every month
Total Interest
₹32.48 L
over loan tenure
Total Payment
₹62.48 L
principal + interest
Principal vs Interest Composition
Where your money goes over the loan tenure
Principal Repayment
Interest Outgo
Analyst Note
On a 20-year home loan at 8.5%, you pay roughly 1.08× the principal in interest. Every additional year of tenure sharply increases the interest bill — a 30-year loan nearly doubles the total outgo compared to a 15-year loan at the same rate. Prepayments made in the first 5–7 years of a reducing-balance loan have disproportionate impact, as early EMIs are dominated by interest.
Yearly Amortization Schedule
How principal and interest split each year
| Year | Principal Paid | Interest Paid | Total Paid | Balance |
|---|
The EMI Formula
Reducing-balance method
Indian banks and NBFCs compute EMI on the reducing-balance principle. Each EMI is a fixed amount, but the split between interest and principal shifts month by month as the outstanding balance reduces.
EMI = P × r × (1 + r)n / [(1 + r)n − 1]
where P is the principal loan amount, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the total number of monthly instalments (tenure in years × 12).
Frequently Asked Questions
Common EMI queries answered
How is EMI calculated in India?
Indian lenders use the reducing-balance method. The EMI remains fixed through the tenure, but the interest component is calculated on the outstanding principal each month, so the interest portion is highest in early months and declines over time.
Does a longer tenure mean a cheaper loan?
No. A longer tenure lowers the monthly EMI but increases total interest paid substantially. For example, a ₹30 lakh loan at 8.5% costs about ₹32 lakh in interest over 20 years, but nearly ₹53 lakh over 30 years — almost 60% more.
When should I prepay my loan?
Prepayments in the first 5–7 years of a long-tenure loan have the highest impact because early EMIs are interest-heavy. A lump-sum prepayment in year 3 of a 20-year home loan can save more interest than the same amount paid in year 12.
Are home loan EMIs tax-deductible?
Yes. Under Section 24(b), interest paid on a home loan is deductible up to ₹2 lakh per year for a self-occupied property. Principal repayment qualifies for deduction under Section 80C up to ₹1.5 lakh per year, shared with other 80C investments.
Disclaimer: This calculator is for illustrative purposes only. Actual EMI, interest rate, and charges may vary based on lender policies, processing fees, insurance, GST, and borrower-specific factors. Zumedha Equity Research does not provide lending services. Consult your bank or a qualified financial advisor before taking a loan decision. Past interest rate trends are not indicative of future rates.