EMI Calculator

An EMI (Equated Monthly Instalment) is the fixed monthly payment you make to repay a loan over a chosen tenure. It consists of two parts: principal repayment and interest. In the early months, most of your EMI goes to interest; in later months, more goes to principal — this is the reducing balance method used by all Indian banks.

The EMI Formula

EMI = P × r × (1 + r)ⁿ / [(1 + r)ⁿ – 1], where P = principal, r = monthly interest rate (annual rate ÷ 12 ÷ 100), n = total months. Most banks use this reducing balance formula — meaning interest is calculated on the outstanding principal, not the original loan amount.

Impact of Tenure on Total Interest Paid

• →₹50L home loan at 9%: 10yr → EMI ₹63,338, Total interest ₹26L
• →₹50L home loan at 9%: 20yr → EMI ₹44,986, Total interest ₹57.9L
• →Extending tenure from 10yr to 20yr halves EMI but pays 2.2× more interest

Prepayment — The Biggest Lever

Prepaying even ₹50,000–₹1L per year on a home loan in the early years dramatically reduces total interest. Most banks allow part-prepayment for floating rate loans without penalty (RBI guidelines). Use our Loan Prepayment Calculator to model the impact.

Home Loan Tax Benefits (Old Regime)

Under the old tax regime, home loan borrowers can claim: Section 24(b) — interest deduction up to ₹2,00,000 per year for self-occupied property, and Section 80C — principal repayment up to ₹1,50,000 per year. These benefits can significantly reduce net cost of borrowing for high-income earners.