Aarambha: Learn & InvestAn EMI is the fixed amount you pay every month until a loan is gone. At first most of it is interest; later, most of it pays off the loan itself. Compare loan lengths and see how much interest a yearly prepayment saves, before you sign or prepay.
Your numbers
Fifty lakh rupees
Use 0 for a no-cost EMI. Fees are left out.
Zero rupees
Paid at each year's end. The EMI stays; the loan ends sooner.
Your monthly EMI
₹43,391
Interest adds ₹54.14 lakh to the ₹50 lakh you borrow.
- Total interest
- ₹54,13,879
- Total you repay
- ₹1,04,13,879
Assumptions · Checked 5 November 2026 by Prashanth Sekhar
Estimates for education, not tax, legal or investment advice. Report a wrong number
Understand your result
An EMI pays the month's interest first and the loan second. Early on, most of each EMI is interest; only late in the loan does most of it go to the principal.
That is why prepaying early is so powerful. Every rupee you prepay stops charging interest for all the years that are left.
A common mistake
Comparing loans by EMI alone. A longer tenure lowers the EMI but can nearly double the interest. Look at the total interest too.
How it's worked out
EMI = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1), with r the monthly rate and n the months. Interest is charged on what's left each month.
Assumptions
- The rate stays the same for the whole loan; floating rates move with the lender's benchmark.
- Fees, insurance and home-loan tax benefits are left out.
- Banks can't charge individuals a penalty for prepaying a floating-rate loan. Fixed-rate loans may have one.
Sources
Updates
- 5 November 2026: Published. Rules checked against the Income-tax Act, 2025, the Finance Act, 2026 and the official October to December 2026 rates.
Questions people ask
Should I reduce the EMI or the tenure when I prepay?
Reducing the tenure saves more interest. Reducing the EMI gives you more room each month. This calculator keeps the EMI and shortens the loan.
Is there a penalty for prepaying?
Banks can't charge individuals a prepayment penalty on floating-rate loans, under RBI rules. Fixed-rate loans can carry one, so check your loan agreement.
Should I prepay or invest?
Prepaying earns you the loan rate, with no risk. Investing might earn more but isn't certain. Many people do both, and keep an emergency fund first.
Does it include the tax benefit on a home loan?
No. Home-loan deductions apply only in the old regime, and are left out here.