Loan Calculator
The Reducing-Balance Loan Calculator
How to read this calculator
This instrument models a standard reducing-balance loan using the EMI formula P × r × (1+r)ⁿ ÷ ((1+r)ⁿ − 1), where P is principal, r is the monthly rate, and n is the tenure in months. Each EMI you pay is split into an interest component (computed on the outstanding balance at the start of that month) and a principal component (the residual).
The panel on the right reports four primary outputs — your monthly EMI, cumulative interest outgo, total cost of the loan, and the effective APR (which bakes in processing fees). Below, the amortization schedule shows you every EMI broken down into its interest and principal parts, and the scenario grid compares the life-of-loan impact of modest prepayments.
Adjust any slider on the left — the charts, tables, and scenarios all recompute instantly.
EMI-by-EMI Schedule
| # | Period | EMI | Principal | Interest | Prepaid | Balance |
|---|
I. The 50% Rule
On a 20-year home loan at 8.5%, the first half of your tenure pays down only a small fraction of the principal — roughly 30–35%. Understanding this asymmetry is the single most useful piece of borrower literacy.
II. Prepayment Arithmetic
Every ₹1 of extra principal you prepay in Year 1 saves roughly ₹1.50–₹2.50 in future interest over the life of a typical home loan. Prepayments in the final years save almost nothing.
III. Tenure vs. Rate
Cutting tenure by 5 years typically saves more interest than shaving 50 bps off the rate. Borrowers fixated on rate-shopping often miss the bigger structural lever.
IV. Tax-Adjusted Cost
For self-occupied home loans, up to ₹2 L of interest (Sec. 24b) and ₹1.5 L of principal (Sec. 80C) are deductible annually under the old regime — effectively lowering the after-tax cost of borrowing by roughly 100–150 bps for those in the 30% slab.