EMI calculator, with the full amortisation schedule

The EMI never changes, but what it buys changes every month — early on, most of it is interest. See the year-by-year split that decides when to prepay.

How the EMI is calculated

Every bank uses the same reducing-balance formula: EMI = P × r × (1+r)ⁿ ÷ ((1+r)ⁿ − 1), where P is the amount borrowed, r the monthly rate (annual rate ÷ 1200) and n the number of months. On ₹30,00,000 at 9% for 20 years that works out to ₹26,992 a month — and ₹34.8 lakh of interest over the life of the loan, more than the amount borrowed.

The EMI never changes, but what it buys changes every month. Interest is charged on the outstanding balance, so early on — when the balance is at its largest — most of the EMI goes to interest. By the final year the split has flipped.

Why the schedule matters more than the EMI

Two decisions depend on the schedule, not the headline number:

• When to prepay. A prepayment kills principal directly, and the earlier it lands the more front-loaded interest it wipes out. The same ₹1 lakh prepaid in year 2 saves several times what it saves in year 15. Our prepay-vs-invest calculator puts a precise number on it.
• Tenure vs EMI when rates change. When your floating rate rises, banks quietly extend tenure rather than raise the EMI. The schedule shows what that costs: extra years of mostly-interest payments at the end of the loan.

Reduce the EMI, or reduce the tenure?

Every time you prepay, your lender will ask which you want — and the default at several banks is the one that costs you more. Reducing the tenure is what saves interest. Reducing the EMI feels better every month and gives most of the saving back.

The reason is in the schedule above. Interest accrues on the outstanding balance for as long as that balance exists. Cutting the tenure removes the final years of the loan outright — years that are cheap in principal terms but still charge interest every month. Cutting the EMI leaves the end date where it was and simply thins each payment, so the balance stays alive just as long.

Take the EMI reduction only when the monthly figure is genuinely straining the household budget. That is a cash-flow decision, and a real one — but it should be made deliberately, not accepted because it was the form’s default.

When your floating rate resets

On a floating-rate loan the bank has two levers when rates move: your EMI, or your tenure. Left alone, most lenders historically extended the tenure — the EMI stayed comfortingly identical while years quietly got added to the end.

Since the RBI’s August 2023 directions on resetting floating rates for EMI-based personal loans, that is your choice rather than theirs. At a reset your lender must tell you the impact, and must offer you the option to increase the EMI, extend the tenure, or both — and to switch to a fixed rate. They also have to give you a statement showing principal and interest recovered so far, the EMI, and how many instalments remain.

• Read the reset letter rather than filing it. It is the one moment the choice is explicitly yours.
• Check the remaining tenure against what you originally signed. If it has grown without you agreeing to it, that is worth a conversation.
• Absorbing a rate rise in the EMI costs less overall than absorbing it in the tenure, for the same reason tenure reduction beats EMI reduction on a prepayment.

What this calculator deliberately doesn't do

It doesn't guess processing fees, insurance add-ons, or moratorium interest — those vary by lender and belong in your sanction letter, not a generic tool. And it won't tell you whether the loan is a good idea. It shows the arithmetic; the judgement stays yours.