EMI & Loan Prepayment Calculator
Work out your EMI, the total interest, and how much interest and time you save by paying extra. Runs in your browser; nothing is uploaded.
A worked example
Say you take a Rs 50,00,000 loan at 8.5% for 20 years. The EMI works out to Rs 43,391 a month, and over the full term you pay about Rs 54,13,879 in interest, more than the loan itself. If you pay an extra Rs 5,000 every month on top of the EMI, the loan closes in 15 years and 7 months instead of 20, and the interest bill drops to about Rs 40,24,629, a saving of roughly Rs 13,89,250 for adding less than half a lakh a year.
Understanding the calculation
- Each month
- Interest = balance times the monthly rate. The rest of the EMI, plus any extra you pay, reduces the balance. A lump sum is taken off the balance in the month you choose.
- Keeping the same EMI
- The EMI stays the same, and the loan simply ends sooner, which is where the interest saving comes from.
Common questions
How is EMI calculated?
EMI = P x r x (1 + r) to the power n, divided by ((1 + r) to the power n, minus 1), where P is the loan, r is the monthly rate (annual rate divided by 12) and n is the number of months. Interest is charged each month on the balance that is still outstanding.
Why do the early EMIs go mostly to interest?
Because the balance is highest at the start, the monthly interest is highest too, so a smaller share of the EMI reduces the loan. That is why prepaying early saves the most interest.
How does prepayment help?
Paying extra reduces the balance sooner, so less interest builds up. You can shorten the loan while keeping the same EMI. This page shows the interest saved and the time saved for a monthly extra amount, a one-time lump sum, or both.
Are there charges for prepaying?
Banks generally cannot charge prepayment penalties on floating-rate home loans to individuals, but other loans and fixed-rate loans may. Check your loan terms, since this page ignores fees.
Does the rate change?
On floating-rate loans it can. This page assumes one fixed rate for the whole loan, so treat the result as an estimate if your rate is linked to a benchmark.
Is there a tax benefit on a home loan?
Under the old tax regime, interest on a self-occupied house is deductible up to Rs 2 lakh a year and principal counts under Section 80C. This page does not model tax.