How to Calculate Your Loan EMI and How Much Prepayment Saves
A ₹50 lakh home loan at 8.5% for 20 years costs about ₹43,391 a month. Over the full term you'd pay roughly ₹54 lakh in interest on top of the ₹50 lakh borrowed. Most people never see that second number until a few years in. Loan payment shows both, the full schedule, and what happens when you prepay.
Steps
- Enter the amount, annual rate and years, or type it in one line like "EMI for 50L at 8.5% 20 yrs" in Quick entry.
- Open Prepay to add an extra monthly payment or a lump sum, and choose whether to finish sooner or lower the EMI.
- Read the year-by-year schedule, or download it as CSV.
How the EMI is calculated
It's the standard reducing-balance formula used by lenders: the monthly rate r is the annual rate ÷ 12, n is the number of months, and
EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1)
Each month, interest is the outstanding balance × r, and the rest of the EMI reduces the balance. That's why early EMIs are mostly interest and later ones mostly principal. The schedule makes this obvious.
At a 0% rate, the payment is just the principal divided by the months.
Prepayment: the biggest lever you have
On that ₹50 lakh, 8.5%, 20-year loan, paying ₹5,000 extra every month saves about ₹13.9 lakh in interest and ends the loan more than four years early. The extra goes straight to the balance, so it reduces every future month's interest.
Finish sooner or lower the EMI? Keeping the EMI and shortening the loan saves more interest. Lowering the EMI eases the monthly budget. The page shows both so you can decide what you value more.
When rates change
Most Indian home loans are floating-rate. Open Compare another rate to see what a rise does: at 9.5% instead of 8.5%, the same ₹50 lakh over 20 years becomes about ₹46,607 a month, roughly ₹7.7 lakh more interest over the term. Lenders often extend the tenure instead of raising the EMI when rates rise, which quietly costs even more. Ask your bank which they've done.
Practical tips
- Prepay early in the loan, when the balance (and the interest on it) is highest.
- Check prepayment charges. In India, floating-rate home loans to individuals generally can't carry foreclosure or prepayment penalties under RBI rules, but fixed-rate and other loans may. Read your agreement.
- Keep an emergency fund first. Prepaying is great, but not at the expense of having no cash buffer.
- Use lakh/crore formatting under Show amounts as (12,34,567.00) if you think in Indian units.
- Export the CSV to compare offers from two lenders side by side.
What the calculator leaves out
Processing fees, loan insurance, floating-rate resets and prepayment charges aren't part of the formula. Your lender's sanction letter and key fact statement have the full cost.
Rules as of October 2026
Rules as of 27 October 2026. The page uses the standard reducing-balance EMI formula. Real loans can include processing fees, insurance, floating-rate resets and prepayment charges. Check your loan agreement and lender.
Official sources:
Privacy
The tool page says figures stay in the tab and aren't uploaded, and the CSV is built in the tab. The page shows Google ads, like the rest of the site.
FAQ
How much does prepaying save? On ₹50 lakh at 8.5% over 20 years, ₹5,000 extra a month saves about ₹13.9 lakh in interest.
Reduce the EMI or the tenure? Reducing the tenure saves more; reducing the EMI eases cash flow.
What if the rate goes up? Use Compare another rate to see the new EMI and extra interest.
Can I see lakh and crore? Yes, under Show amounts as.
Before you sign a loan, run the numbers on Loan payment.
— Alok Kumar Singh