Loan Amortization Calculator

How to Use the Loan Amortization Calculator

• Enter Loan Amount: the principal amount borrowed.
• Enter Annual Interest Rate: the nominal rate quoted by your lender.
• Enter Loan Tenure: total repayment period in months.
• The calculator generates a full month-by-month schedule showing principal, interest, and outstanding balance for every payment.

Tip: Compare two scenarios with different tenures to see how extending the loan drastically increases total interest paid even though EMI drops.

Amortization Formula

EMI = P x r x (1+r)^n / ((1+r)^n – 1)

Where: P = Principal, r = Monthly interest rate (annual/12), n = Number of months.

Example:

• Loan: Rs 50 Lakh, Rate: 10% p.a., Tenure: 20 years (240 months)
• Monthly rate: 10%/12 = 0.833%
• EMI = Rs 48,251
• Total Payment: Rs 1.158 Crore
• Total Interest: Rs 65.8 Lakh (more than the principal!)

In the early years, 70-80% of each EMI goes to interest. Only in the final years does principal repayment dominate. This is why prepayment in early years saves the most interest.

Loan Interest Rates in India (2026)

• Home Loan: 8.25-9.50% (SBI, HDFC, ICICI)
• Personal Loan: 10.5-24% (depends on credit score)
• Business Loan: 12-18% (NBFCs), 10-14% (banks)
• Education Loan: 8-12% (collateral-backed lower)
• Car Loan: 8.5-12% (new car), 12-18% (used car)
• Gold Loan: 7-12% (lowest rates due to collateral)
• NBFC Lending Rates: 15-36% (depending on segment and risk)

Sources: RBI benchmark rates, bank websites, NBFC rate cards, April 2026.

Prepayment Strategy: How to Save Lakhs in Interest

Rule 1: Prepay in the first 5 years. Since early EMIs are interest-heavy, prepayment in year 1-5 saves the most. A Rs 5 Lakh prepayment in year 2 of a Rs 50 Lakh home loan can save Rs 8-10 Lakh in total interest.

Rule 2: Reduce tenure, not EMI. When you prepay, choose to keep EMI the same and reduce tenure. This compounds the savings because you eliminate the highest-interest months from the end of the schedule.

Rule 3: Check prepayment penalties. RBI has prohibited prepayment charges on floating-rate home loans. Fixed-rate loans and personal loans may have 2-5% prepayment penalties. Factor this into your decision.

For fintech lenders: Amortization schedules are critical for NPA management. Track the principal-interest split at portfolio level. High early-delinquency on recently originated loans is more damaging because the outstanding principal is highest. Use our DSCR Calculator to assess borrower repayment capacity before origination.