A home loan of ₹20 lakh at 8.5% a year for 20 years has an EMI of ₹17,356. Over the whole loan you pay ₹41,65,552, of which ₹21,65,552 is interest. That is 108 paise of interest for every rupee you borrow.
In the first year you pay ₹2,08,278 in EMIs. ₹1,68,473 of that is interest and only ₹39,805 repays the loan, so 81% of your first year’s EMIs goes to interest. After year 1 you still have ₹19,60,195 left to repay.
The EMI stays the same, but its mix changes every month. Principal first becomes larger than interest in year 13 of 20.
If you took the same loan for 15 years instead, the EMI would rise to ₹19,695 but the interest would fall to ₹15,45,062, which is ₹6,20,489 less.
A rate half a point lower, 8%, would make the EMI ₹16,729, which is ₹628 less each month. A rate half a point higher, 9%, would make it ₹17,995.
If you pay ₹1,700 extra every month on top of the EMI, the loan is cleared 3 years 11 months sooner and you save ₹4,93,064 in interest.
Change these numbers in the EMI calculator
Illustration only, not investment, tax or legal advice.
The numbers behind it
- Loan amount
- ₹20,00,000
- Interest rate (per year)
- 8.5%
- Tenure
- 20 years (240 months)
- EMI
- ₹17,356
- Total interest
- ₹21,65,552
- Total paid
- ₹41,65,552
| Year | EMIs paid | Interest | Principal repaid | Balance left at year end |
|---|---|---|---|---|
| 1 | ₹2,08,278 | ₹1,68,473 | ₹39,805 | ₹19,60,195 |
| 2 | ₹2,08,278 | ₹1,64,955 | ₹43,323 | ₹19,16,872 |
| 3 | ₹2,08,278 | ₹1,61,125 | ₹47,152 | ₹18,69,720 |
| 4 | ₹2,08,278 | ₹1,56,957 | ₹51,320 | ₹18,18,400 |
| 5 | ₹2,08,278 | ₹1,52,421 | ₹55,856 | ₹17,62,544 |
| 6 | ₹2,08,278 | ₹1,47,484 | ₹60,794 | ₹17,01,750 |
| 7 | ₹2,08,278 | ₹1,42,110 | ₹66,167 | ₹16,35,583 |
| 8 | ₹2,08,278 | ₹1,36,262 | ₹72,016 | ₹15,63,567 |
| 9 | ₹2,08,278 | ₹1,29,896 | ₹78,381 | ₹14,85,186 |
| 10 | ₹2,08,278 | ₹1,22,968 | ₹85,309 | ₹13,99,876 |
| 11 | ₹2,08,278 | ₹1,15,428 | ₹92,850 | ₹13,07,026 |
| 12 | ₹2,08,278 | ₹1,07,220 | ₹1,01,057 | ₹12,05,969 |
| 13 | ₹2,08,278 | ₹98,288 | ₹1,09,990 | ₹10,95,980 |
| 14 | ₹2,08,278 | ₹88,566 | ₹1,19,712 | ₹9,76,268 |
| 15 | ₹2,08,278 | ₹77,984 | ₹1,30,293 | ₹8,45,975 |
| 16 | ₹2,08,278 | ₹66,468 | ₹1,41,810 | ₹7,04,165 |
| 17 | ₹2,08,278 | ₹53,933 | ₹1,54,345 | ₹5,49,820 |
| 18 | ₹2,08,278 | ₹40,290 | ₹1,67,987 | ₹3,81,833 |
| 19 | ₹2,08,278 | ₹25,442 | ₹1,82,836 | ₹1,98,997 |
| 20 | ₹2,08,278 | ₹9,281 | ₹1,98,997 | ₹0 |
Sources and method
The standard reducing-balance loan formula: each month’s interest is charged on the balance still left, and the payment stays the same.
No outside data is used. The numbers you type in are the only inputs.
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