EMI (Equated Monthly Installment) Calculator

EMI is calculated using the formula: EMI = P × r × (1+r)^n / ((1+r)^n - 1), where P is the principal loan amount, r is the monthly interest rate (annual rate / 12 / 100), and n is the total number of monthly installments. The formula ensures equal payments that fully amortize the loan over the tenure.

Prepayments reduce the outstanding principal, which means less interest is charged on the remaining balance. Even small annual prepayments can significantly reduce total interest and loan tenure. For example, prepaying ₹1L annually on a ₹50L home loan can save several lakhs in interest and reduce tenure by years.

Home loan borrowers can claim tax deductions under two sections: Section 80C allows up to ₹1,50,000 deduction on principal repayment, and Section 24(b) allows up to ₹2,00,000 deduction on interest paid for a self-occupied property. These benefits can significantly reduce the effective cost of borrowing.

A moratorium is a period during which EMI payments are paused — typically at the start of a loan (e.g., during home construction). However, interest continues to accrue during this period and is added to the principal, increasing the total cost. This calculator models the impact of moratorium on your total interest outgo.

Processing fees are one-time charges levied by banks for processing your loan application. They typically range from 0.25% to 2% of the loan amount. Other charges may include stamp duty, legal fees, valuation charges, and insurance premiums. These are added to the total cost of the loan.

Step-up EMI means your EMI amount increases annually by a fixed percentage (typically aligned with expected salary growth). This allows you to start with a lower EMI and gradually increase it, enabling faster loan repayment as your income grows. It can help pay off the loan faster and save on total interest.

Reducing tenure saves more total interest because you pay off the loan faster. Reducing EMI gives immediate cash flow relief by lowering your monthly payment. If your goal is to minimise total cost, choose tenure reduction. If you need lower monthly outflow, choose EMI reduction.

No. The interest rates are illustrative defaults based on typical market ranges. Actual rates depend on your credit score, loan amount, tenure, bank policies, and prevailing market conditions. Always verify the current rate with your bank or NBFC before making borrowing decisions.