EMI Calculator (with Prepayment): Save Interest and Time

Knowing your EMI matters, but the real savings hide in prepayment. This calculator shows how much interest and time extra payments can save you.

What is it?

EMI is the fixed monthly instalment you pay a bank, made up of both principal and interest. Early in the loan, most of each EMI is interest.

How is it calculated?

EMI = P × i × (1+i)ⁿ ÷ [(1+i)ⁿ − 1], where P is the loan amount, i is the monthly interest rate and n is the number of months.

Example

A ₹25 lakh loan at 9% over 20 years gives an EMI of about ₹22,493. Paying a little extra each month can save several lakh in interest.

Key things to know

• Prepayments in the early years save the most interest.
• Put part of any bonus or raise toward prepayment.
• Floating-rate loans usually carry no prepayment penalty.
• If rates fall, consider a balance transfer.

What to do next

Compare bank rates before taking a loan or transferring a balance.

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Frequently asked questions

Does prepayment really help?
Yes — especially in the early years, when interest forms the bulk of each EMI.

Reduce the EMI or the tenure?
Reducing tenure saves more total interest.

Is there a prepayment charge?
Generally not on floating-rate home loans.

Disclaimer: This article is for general information only and is not financial or tax advice. Consult a qualified advisor before making investment or tax decisions.