Loan EMI Calculator

EMI = P × r × (1+r)^n ÷ ((1+r)^n − 1), where P is the amount borrowed, r is the monthly interest rate (the annual rate divided by twelve) and n is the number of monthly instalments. The instalment stays the same each month, but its make-up shifts: early payments are mostly interest, later ones are mostly principal. That shift is why the amortisation schedule on this page is worth reading.

A reducing balance rate charges interest only on what you still owe, so the interest portion falls every month. A flat rate charges interest on the full original amount for the entire term, ignoring everything you have already repaid. The same headline number therefore costs far more when it is quoted flat — a 9.5% flat rate on a fifteen-year loan works out at roughly 14% on a reducing balance. Always ask a lender which basis their quote uses before comparing it with another.

Substantially, because every rupee of extra principal removes all the future interest that rupee would have attracted. On a fifty lakh loan at 9.5% over fifteen years, an extra Rs 10,000 a month clears the loan more than four years early and saves over fourteen lakh in interest. Use the prepayment fields on this page to model your own figures.

Often, yes. Many lenders levy a prepayment or swap fee on early settlement, and the terms vary between banks and between products. The amount and the conditions are set out in your sanction letter or loan agreement, so check there before making a lump sum payment — the fee is usually still far smaller than the interest saved, but it should be part of the calculation.

Most lenders deduct a one-off service or processing charge, commonly a small percentage of the loan, at the time of disbursement. You repay instalments on the full sanctioned amount but only receive the amount net of that fee, so your true cost of borrowing is slightly above the quoted rate. Enter the percentage on this page and it will show you the effective rate including the fee.

A longer tenure lowers the monthly instalment but raises the total interest considerably, because the balance stays high for longer. A shorter tenure does the reverse. The usual advice is to take the shortest tenure whose EMI you can comfortably service through a bad month, rather than the shortest you can service in a good one.