Monthly EMI
| Year | Principal Paid | Interest Paid | Balance Remaining |
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Prepayment Calculator
See how much interest and time you can save by paying extra towards your loan every month.
What is EMI?
EMI (Equated Monthly Installment) is the fixed amount you pay every month towards your loan, covering both principal and interest, until the loan is fully repaid.
Formula used: EMI = [P × R × (1+R)^N] / [(1+R)^N − 1], where P is principal, R is monthly interest rate, and N is number of monthly installments.
How to reduce your EMI
- Make a larger down payment to lower the principal amount.
- Choose a longer tenure to reduce the monthly outgo (note: this increases total interest).
- Compare rates across lenders and negotiate a lower interest rate.
- Make periodic prepayments to shrink the outstanding principal faster.
Frequently Asked Questions
Most lenders and financial planners recommend keeping total EMI obligations below 40-50% of your monthly take-home income, leaving room for savings and expenses.
Yes, many lenders allow you to adjust your EMI by changing the loan tenure or making a part-prepayment. Increasing your EMI shortens the tenure and cuts total interest paid.
Missing an EMI usually attracts a late fee and additional interest, and can hurt your credit score. Repeated defaults may lead to loan recall or legal action.
No, the standard EMI covers only principal and interest. Processing fees, insurance, and other charges are usually billed separately or added to the loan amount.
Most loans allow partial prepayment or full foreclosure after an initial lock-in period. Prepaying reduces the outstanding principal, lowering total interest and often shortening the tenure.
A longer tenure lowers your monthly EMI but increases total interest paid over the loan's life. A shorter tenure means a higher EMI but significant interest savings.
Most banks and NBFCs use the reducing balance method, where interest is charged only on the outstanding principal each month — this costs less than flat-rate calculation.