Should I choose a shorter or longer loan term?

A shorter loan term means a higher monthly payment but significantly less total interest. A longer term lowers the monthly payment but increases total interest paid. A common guideline is to keep your monthly payment below 30% of your take-home income.

What is the difference between a reducing balance loan and a flat rate loan?

In a reducing balance loan, interest is calculated on the remaining principal each month — the standard used by most banks globally. In a flat rate loan, interest is calculated on the original loan amount for the full term. A flat rate of 10% is roughly equivalent to a 17-18% reducing balance rate, making flat rate loans significantly more expensive.

Should I make prepayments on my loan?

Generally yes — each extra payment directly reduces your principal, cutting total interest. For mortgages and home loans, confirm there is no prepayment penalty first. For auto and personal loans, check your lender's terms, as a penalty can sometimes offset the interest savings.

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Q: How accurate is this loan calculator?

Very accurate for fixed-rate loans. It uses the standard reducing-balance amortization formula used by major lenders globally. Results match most bank statements precisely when the principal, rate, and loan term are correct. Calculations do not account for floating-rate changes, lender-specific fees, or insurance charges.

Q: What is an amortization schedule?

An amortization schedule is a complete table of every loan payment, showing how much goes to principal and how much goes to interest each month. Early payments are mostly interest; later payments are mostly principal. It shows your exact payoff date and total borrowing cost.

Calculate your EMImonthly payment, compare loan offers, and view a full amortization schedule — for home, car, and personal loansmortgages, auto loans, and personal loans.

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Loan Amount (₹)

Total amount you plan to borrow. Property cost = Loan Amount + Down Payment.

Down Payment (₹)

Amount you'll pay upfront. Crucial for mortgage and car calculations.

Interest Rate (% per year)

Most home loans: 8–10%. Car: 9–12%. Personal: 11–18%.

Loan Tenure

Longer tenure = lower EMI but more interest overall

Monthly Take-Home Income (optional)

Used to check if this EMI fits your budget. Not stored.

Processing Fee (%)

Banks typically charge 0.5–2% of the loan amount

Your Monthly EMI

—

Total Interest

—

Total Amount

—

True Cost (incl. fees)

—

Loan-Free Date

—

Principal Interest

50% 50%

Uses standard reducing-balance formula

Calculation assumes a fixed interest rate, no late fees, and compounding periods matching payment frequency.

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Compare Loan Offers

See two or three options side by side. Change rate, tenure, or amount in each.

Scenario A —

EMI—

Total Interest—

Total Cost—

Payoff Date—

EMI/Income—

See how extra payments reduce total interest and shorten your loan.

Annual Prepayment (₹)

Start From Year

Without Prepayment

Total InterestEnter values above

TenureEnter values above

With Prepayment

Total InterestEnter values above

TenureEnter values above

Interest SavedNot available yet

Months SavedNot available yet

Year-by-year breakdown of your loan repayment.

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How loan and EMI calculation works How monthly payment calculation works

A loan payment calculator estimates your EMI (Equated Monthly Instalment)monthly payment, total interest, and payoff date for a fixed-rate loan. The standard formula uses a reducing-balance method — each payment covers that month's interest first, with the remainder reducing your principal.

1 Reducing Balance — the global standard

Used by most banks worldwide for mortgages and term loans

• Interest is charged on the remaining balance each month
• As you repay, the interest portion shrinks and principal portion grows
• Formula: EMIP = [P × R × (1+R)^N] / [(1+R)^N − 1]

2 Flat Rate — watch the true cost

Some personal and vehicle loans

• Interest is charged on the original loan amount for the full tenureterm
• Each month's payment stays the same, but effective cost is much higher
• A 10% flat rate ≈ 17–18% reducing balance rate
• Common with some NBFCs and two-wheeler financiersCommon with some non-bank personal and vehicle lenders

Example: ₹10L loan at 10% for 5 years Example: $30,000 auto loan at 7% for 5 years

Reducing balance vs. flat rate — same stated rate, very different cost

Metric	Reducing Balance	Flat Rate
Monthly EMIMonthly Payment	₹21,247$594	₹25,000$625
Total Interest	₹2,74,823$5,640	₹5,00,000$10,500
Effective Rate	10.00%7.00%	~17.3%~13.2%

Frequently Asked Questions

Quick answers to common borrowing questions.

How accurate is this loan calculator?

Very accurate for fixed-rate loans. It uses the standard reducing-balance amortization formula used by major lenders globally. Results match most bank statements precisely when the principal, rate, and tenureloan term are correct. Calculations do not account for floating-rate changes, lender-specific fees, or insurance charges.

What is an amortization schedule?

An amortization schedule is a complete table of every loan payment, showing how much goes to principal and how much goes to interest each month. Early payments are mostly interest; later payments are mostly principal. It helps you see your exact payoff date and total cost.

Should I choose a shorter or longer loan tenure?

Shorter tenureterm: Higher EMImonthly payment, but much less total interest. Longer tenureterm: Lower payments, but significantly more interest paid overall. A common guideline is to keep your EMImonthly payment below 30% of your take-home income.

What is the difference between reducing balance and flat rate?

Reducing balance: Interest is calculated on the remaining principal each month — the standard used by most banks globally. Flat rate: Interest is calculated on the original loan amount for the full tenureterm. A flat rate of 10% is equivalent to roughly 17–18% reducing balance — significantly more expensive. Flat rates are common with some NBFCs and two-wheeler financiers.Flat rates sometimes appear in personal and vehicle loans from non-bank lenders.

Should I make prepayments?

Generally yes — each extra payment directly reduces your principal, cutting total interest. For home loans, most banks allow penalty-free prepayments as per RBI guidelines. For personal and car loans, check for prepayment charges (typically 2–5% of the outstanding balance).For mortgages, confirm there is no prepayment penalty first. For auto and personal loans, check your lender's terms — a penalty can offset the interest savings.