Monthly EMI
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Principal vs interest
How much of your total payment goes to principal versus interest.
Outstanding balance
See how your loan balance falls as EMIs pay down principal.
| Year | Principal | Interest | Total paid | Balance |
|---|---|---|---|---|
| Run a calculation to see the yearly schedule. | ||||
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Sizing a loan repayment before you commit
An EMI is the fixed monthly payment that clears a loan over its tenure, covering both interest and principal. Enter the amount, the annual rate, and the tenure to see the instalment, the total interest, and the full amount you will have repaid by the end. The same arithmetic applies to a home loan, a car loan, and a personal loan — only the inputs differ.
Why a longer tenure is not the cheaper option
Stretching the tenure lowers the monthly payment, which is why it gets recommended, but it raises the total interest substantially — the balance stays outstanding for longer, so there is more of it to charge interest on. Try the same loan over fifteen years and twenty-five and compare the total interest figures. The monthly difference is modest; the lifetime difference rarely is.
Reading the repayment schedule
Early instalments are almost entirely interest, and only later do they start repaying meaningful principal. This has a practical consequence: prepayments made in the first few years cut far more total interest than the same amount paid near the end, because they remove principal that would otherwise have accrued interest for the whole remaining tenure.
Once you have settled on an instalment you can carry comfortably, plan what is left with the SIP calculator, or park short-term money in an FD or RD.
FAQ
EMI calculator FAQs
How is an EMI calculated?
For reducing-balance loans, EMI = P × r × (1+r)^n / ((1+r)^n − 1), where P is the loan amount, r the monthly interest rate, and n the number of months. Interest each month is charged on the balance still outstanding, which is why the split between interest and principal shifts as the loan runs down.
Does this work for a home loan?
Yes. Enter the loan amount, the rate, and a tenure such as 20 years. Car loans and personal loans use identical arithmetic — they just tend to have shorter tenures and higher rates.
Why is so much of my early EMI going to interest?
Because interest is charged on the outstanding balance, which is at its largest right at the start. The instalment stays fixed, so as the balance falls the interest portion shrinks and the principal portion grows. The yearly schedule shows exactly where that crossover happens.
Should I choose a longer tenure to lower the EMI?
Only if the shorter tenure genuinely strains your cash flow. A longer tenure reduces the monthly payment but increases the total interest considerably, since the principal stays outstanding for more years. Compare the total interest on both before deciding.
How much does prepaying actually save?
Far more early than late. A prepayment in the first few years removes principal that would otherwise have accrued interest for the entire remaining tenure; the same amount paid in the final years saves very little. Check your lender’s prepayment terms, which vary by loan type.