EMI Calculator
Your monthly instalment, the total interest, and what prepaying saves.
- Amount borrowed
- ₹10,00,000
- Interest you pay
- ₹2,45,501
- Total repaid
- ₹12,45,501
Over 5 years you repay ₹12,45,501 on a loan of ₹10,00,000. That is 25% of what you borrowed, added on top, as interest.
What if you pay a bit extra?
Your lender will not model this for you. Every rupee paid on top of the instalment comes straight off the balance, so it stops earning interest for the whole remaining life of the loan. Put in a number you could genuinely manage.
If the rate moves
Almost every home loan in India is floating, so the rate you sign at is not the rate you pay for the whole term. When it resets, most lenders hold the EMI steady and quietly extend the tenure instead, which is easy to miss because nothing changes in your bank statement. This is what each move does to your loan, at the tenure you set above.
Read the bottom line rather than the middle one. Holding the instalment where it is turns a rate rise into extra years rather than a bigger bill, and those years are almost entirely interest. Ask your lender for the revised tenure after every reset.
Repayment schedule
| Year | Principal paid | Interest paid | Balance left |
|---|---|---|---|
| 1 | ₹1,65,830 | ₹83,270 | ₹8,34,170 |
| 2 | ₹1,81,386 | ₹67,714 | ₹6,52,784 |
| 3 | ₹1,98,401 | ₹50,699 | ₹4,54,383 |
| 4 | ₹2,17,013 | ₹32,088 | ₹2,37,370 |
| 5 | ₹2,37,370 | ₹11,730 | ₹0 |
Early instalments are mostly interest and late ones are mostly principal, which is why paying extra in the first years saves far more than the same amount paid later.
What an EMI calculator tells you
An EMI is a fixed monthly payment that covers both interest and repayment of the amount you borrowed. This calculator gives you three numbers: the instalment, the total interest you will pay over the life of the loan, and the balance remaining at the end of each year.
The second of those is the one worth staring at. On a long loan the interest can approach or exceed the amount borrowed, and it never appears on the loan document as a single figure.
How an EMI is calculated
EMI = P × i × (1 + i)^n ÷ [(1 + i)^n − 1]- P is the loan amount
- i is the monthly rate, so 9% a year is 0.09 ÷ 12 = 0.0075
- n is the number of monthly instalments
The instalment stays the same every month, but what it is made of does not. Early on, most of it is interest and very little touches the principal. That reverses over the tenure, which is exactly what the schedule above shows.
EMI on common loan amounts
Monthly instalments at 9% a year, across the loan sizes and tenures people usually compare. Your own rate will differ by a percentage point or two depending on the lender and your credit score, so treat this as the shape of the decision rather than a quote.
| Loan amount | 1 years | 3 years | 5 years | 7 years | 10 years |
|---|---|---|---|---|---|
| ₹3L | ₹26,235 | ₹9,540 | ₹6,228 | ₹4,827 | ₹3,800 |
| ₹5L | ₹43,726 | ₹15,900 | ₹10,379 | ₹8,045 | ₹6,334 |
| ₹10L | ₹87,451 | ₹31,800 | ₹20,758 | ₹16,089 | ₹12,668 |
| ₹20L | ₹1,74,903 | ₹63,599 | ₹41,517 | ₹32,178 | ₹25,335 |
| ₹30L | ₹2,62,354 | ₹95,399 | ₹62,275 | ₹48,267 | ₹38,003 |
| ₹50L | ₹4,37,257 | ₹1,58,999 | ₹1,03,792 | ₹80,445 | ₹63,338 |
The EMI falls sharply between one year and five, then flattens. Beyond that point each extra year buys very little relief on the monthly payment and costs a great deal in total interest.
Why prepaying early saves so much more
Because early instalments are almost all interest, a rupee of prepayment in year one removes far more future interest than the same rupee in year ten. If you expect a bonus, the schedule above tells you what each year of prepayment is actually worth.
Should you prepay a loan or invest instead?
Compare the loan rate against the return you can realistically earn after tax. A 9% loan is a guaranteed 9% return if you repay it; an equity portfolio might average more, but not reliably and not without volatility. As a rough rule, prepay anything above roughly 10% and invest when the loan is cheap, but weigh the certainty of the guaranteed saving. Model the alternative in the SIP calculator.
Frequently asked questions
How is EMI calculated?
EMI = P × i × (1+i)^n ÷ [(1+i)^n − 1], where P is the loan amount, i is the monthly interest rate and n is the number of months. A ₹10 lakh loan at 9% over 5 years works out to about ₹20,758 a month.
Does a longer tenure reduce my EMI?
Yes, and it increases the total interest considerably. Stretching a loan from 15 to 25 years lowers the monthly payment noticeably but can add years of extra interest, because you owe the balance for ten more years.
What happens if the interest rate changes?
On a floating-rate loan, banks usually keep the EMI the same and extend the tenure instead, so a rate rise quietly adds months or years to the loan. Ask for the revised tenure whenever the rate moves, and re-run this calculator with it.
How much interest can I save by prepaying my loan?
More than most people expect, because every extra rupee comes straight off the principal and stops earning interest for the whole remaining life of the loan. On a ₹50 lakh loan at 8.5% over 20 years, ₹5,000 a month extra saves roughly ₹13.9 lakh in interest and ends the loan about four and a half years early, close to ₹1.50 saved for every ₹1 prepaid. Put your own figures into the prepayment section above.
Should prepayment reduce my EMI or my tenure?
Reduce the tenure if you can afford to. On the same loan and the same extra ₹5,000 a month, cutting the tenure saves around ₹13.9 lakh in interest against around ₹6 lakh from cutting the EMI, because a shorter loan stops the interest clock sooner. Lenders often apply prepayment to the EMI by default without asking, so state which one you want in writing. Reducing the EMI is the right call only when monthly cash flow is genuinely tight.
Is there a penalty for prepaying a loan?
On floating-rate home loans taken by individuals, the RBI does not permit foreclosure charges or prepayment penalties. Fixed-rate loans and many personal and car loans can carry one, typically 2% to 5% of the amount outstanding. Check the sanction letter before making a large prepayment, and ask for the revised amortisation schedule afterwards.
Is it better to prepay or to invest?
Prepaying a loan is a guaranteed, tax-free return equal to the interest rate. An investment might return more but is not guaranteed. High-rate debt such as personal loans and credit cards should almost always be cleared first; a cheap home loan is a closer call.
Does this EMI calculator include processing fees?
No. It calculates the instalment on the loan amount itself. Processing fees, insurance bundled with the loan and documentation charges are extra, and are worth adding to your own comparison between lenders.
A return needs a portfolio behind it
This tool assumes a rate. These are the books a SEBI-registered desk actually runs to chase one.
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