EMI Calculator
Calculate loan EMI for home, car and personal loans
Loan Details
Rs
%
Home: 8.25-9.5% | Car: 8.5-12% | Personal: 10.5-24%
Yr
Quick Presets
EMI Breakdown
Monthly EMI
Rs 43,391
Total Interest
Rs 54.14 L
Total Payment
Rs 1.04 Cr
Interest is 108% of principal
Principal vs Interest
0%
interest
Principal
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Total Interest
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Year-by-Year Payment Split
| Year | Principal | Interest | Balance |
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How the EMI Calculator Works
EMI (Equated Monthly Instalment) is a fixed payment you make every month to repay a loan. Each EMI consists of two parts: interest on the outstanding balance and principal repayment. In the early years, most of the EMI goes towards interest; over time, the principal component increases.
The EMI Formula
EMI = P x r x (1 + r)^n / [(1 + r)^n - 1]
P = Loan principal amountr = Monthly interest rate = Annual rate / 12
n = Total number of monthly instalments
Tax Benefits on Home Loans
- Section 80C: Principal repayment up to Rs 1.5 lakh (old regime)
- Section 24(b): Interest payment up to Rs 2 lakh for self-occupied property (old regime)
- Section 80EEA: Additional Rs 1.5 lakh for affordable housing (if applicable)
Understanding Amortization
An amortization schedule shows the breakdown of each EMI into principal and interest components over the loan tenure. In the early years, interest forms the larger portion. As you continue paying, the principal component grows.
- Reducing balance method: Interest is calculated on the outstanding principal each month, which decreases as you pay EMIs
- Front-loaded interest: Banks earn most of their interest income in the first half of the loan tenure
- Prepayment impact: Even small prepayments early in the tenure can save significant interest over the loan life
Loan Types and Typical Rates
- Home Loan: 8.25% - 9.5% p.a. | Tenure up to 30 years | Tax benefits available under old regime
- Car Loan: 8.5% - 12% p.a. | Tenure 1-7 years | No tax benefits for personal use
- Personal Loan: 10.5% - 24% p.a. | Tenure 1-5 years | No tax benefits unless used for home purchase
- Education Loan: 8% - 15% p.a. | Moratorium period available | Interest deductible under Section 80E
Frequently Asked Questions
EMI uses the reducing balance method: EMI = P x r x (1+r)^n / [(1+r)^n - 1]. Each month, interest is calculated on the remaining principal. As you pay down principal, the interest component decreases and the principal component of each EMI increases.
If your loan interest rate is higher than your expected investment returns (after tax), prepay the loan. For example, if your home loan is at 8.5% and your FD gives 7% (effectively about 4.9% after tax), prepaying the loan saves more. For equity investments with 12%+ expected returns, investing may be better - but involves market risk.
Increasing your EMI reduces the loan tenure significantly and saves a substantial amount on total interest. Even a 10% increase in EMI can reduce a 20-year home loan by 3-4 years.
Floating rates are usually 1-2% lower than fixed rates and adjust with RBI policy changes. Most home loans in India are floating rate. Fixed rates give certainty but cost more overall. For short tenures (3-5 years), fixed may be preferable for planning.
No. Tax deductions under Section 80C and 24(b) are only for home loans. Car and personal loan interest and principal payments are not tax-deductible, unless the personal loan is used for home purchase/renovation or business purposes.
When you make a prepayment, you can choose to either reduce the EMI amount while keeping the same tenure, or keep the same EMI and reduce the tenure. Reducing tenure saves more on total interest. Most banks allow prepayment without penalty on floating rate home loans.