💰 EMI & Loan Prepayment Calculator

EMI (Equated Monthly Installment) is a fixed payment amount you make every month to repay your loan. It includes both the principal amount and interest.

The formula is: EMI = [P × r × (1 + r)^n] / [(1 + r)^n - 1]

• P = Principal loan amount
• r = Monthly interest rate (annual rate ÷ 12 ÷ 100)
• n = Loan tenure in months

For example, a ₹25,00,000 loan at 8.5% for 20 years results in an EMI of approximately ₹21,606.

Interest rate has a direct impact on your EMI. Higher interest rates mean higher EMIs and more total interest paid over the loan tenure.

Example: On a ₹25 lakh loan for 20 years:

• At 8.5% interest: EMI = ₹21,606, Total Interest = ₹26,85,440
• At 9.5% interest: EMI = ₹23,305, Total Interest = ₹30,93,200

Just a 1% increase adds ₹4,07,760 to your total interest payment!

It depends on your financial situation:

Shorter tenure (10-15 years):

• Higher monthly EMI
• Much lower total interest paid
• Faster loan closure
• Better for those with stable, high income

Longer tenure (20-30 years):

• Lower monthly EMI
• Higher total interest paid
• More cash flow flexibility
• Easier to manage for new borrowers

Pro tip: Start with longer tenure for flexibility, then make prepayments to reduce the tenure.

Prepayment means paying extra money towards your loan before it's due. This reduces your outstanding principal, which can significantly reduce total interest and shorten loan tenure.

Benefits:

• Save lakhs in interest payments
• Become debt-free faster
• Reduce financial stress
• Improve credit score faster

Important: Most banks allow prepayment of home loans without penalty for floating rate loans. Check your loan agreement for fixed-rate loans.

Reduce Tenure (Recommended):

• Saves significantly more interest
• Faster loan closure
• Better long-term financial benefit
• Same monthly EMI continues

Reduce EMI:

• Lower monthly obligation
• More monthly cash flow
• Less interest savings compared to tenure reduction
• Good if income has reduced

Example: ₹2,00,000 prepayment on ₹25L loan (8.5%, 20 years)

• Reduce tenure: Save ₹4,26,240, finish 3 years earlier
• Reduce EMI: Save ₹3,12,150, EMI reduces by ₹1,733

Earlier is better! Prepayments in the initial years provide maximum benefit because:

• Early EMIs have higher interest component
• More principal remains to be reduced
• Compound effect over remaining tenure is greater

Best strategy:

• Make prepayments in the first 5-7 years for maximum impact
• Prepay whenever you have surplus funds (bonus, tax refund)
• Regular small prepayments are better than waiting for large amounts

Note: Even late prepayments help, but the benefit is progressively lower in later years.

A good strategy is to prepay 10-20% of your annual income or one extra EMI per year if financially comfortable.

Factors to consider:

• Emergency fund: Keep 6-12 months expenses before prepaying
• Other high-interest debt: Clear credit cards first
• Investment opportunities: Compare returns vs. loan interest saved
• Life stage: Younger borrowers benefit more from aggressive prepayment

Example: Annual income ₹12 lakhs → prepay ₹1.2-2.4 lakhs per year

Step-up EMI allows you to increase your EMI by a fixed percentage annually, helping you pay off loans faster as your income grows.

Ideal for:

• Young professionals expecting salary increments
• Entrepreneurs with growing businesses
• Anyone planning for regular income increases

Benefits:

• Start with affordable EMI
• Automatically increase payments with income growth
• Significant interest savings
• Faster loan closure without manual intervention

Typical increase: 5-10% annually aligned with expected salary hikes

Savings can be substantial with step-up EMI strategy!

Example: ₹25 lakh loan at 8.5% for 20 years

• Regular EMI: ₹21,606/month, Total interest: ₹26.85 lakhs
• 5% annual step-up: Finish in ~12 years, Save ₹10+ lakhs in interest
• 10% annual step-up: Finish in ~9 years, Save ₹15+ lakhs in interest

The key is matching the step-up rate with your expected income growth without overextending yourself.

Simple 3-step process:

1. Enter basic details: Loan amount, interest rate, tenure, and loan start date
2. Add prepayments (optional): Enter annual prepayment amount and choose to reduce EMI or tenure
3. Enable step-up (optional): Set annual EMI increase percentage

The calculator instantly shows your EMI, total payment, interest breakdown, and generates detailed amortization schedules with graphs.

This calculator lets you compare multiple loan strategies simultaneously:

• Regular vs. Prepayment: See how prepayments reduce interest
• Reduce EMI vs. Reduce Tenure: Compare both prepayment methods
• With vs. Without Step-up: Analyze impact of increasing EMIs
• Different prepayment amounts: Find optimal prepayment strategy
• Various step-up rates: Test 5%, 10%, or custom increases

Visual graphs and detailed tables make it easy to understand the long-term impact of each strategy.

Yes, completely secure! This calculator runs entirely in your browser. No data is sent to any server or stored anywhere.

• All calculations happen locally on your device
• No personal information collected or transmitted
• No cookies or tracking
• Data disappears when you close the browser

You can even use it offline once the page loads.

While the calculator doesn't save data between sessions, you can easily capture your results:

• Screenshots: Take screenshots of the results and graphs
• Print/PDF: Use browser's print function (Ctrl+P) to save as PDF
• Manual notes: Copy key numbers for your records

Pro tip: Take screenshots of different scenarios to compare later when making your decision.

Fixed Rate:

• Interest rate remains constant throughout loan tenure
• EMI never changes
• Protection against rate increases
• Usually 1-2% higher than floating rates
• May have prepayment penalties

Floating Rate:

• Interest rate linked to market benchmarks (MCLR, repo rate)
• EMI can increase or decrease
• Generally lower initial rates
• No prepayment penalties (for home loans)
• More popular in India

Recommendation: Floating rate is usually better for long-term home loans in the current Indian market.

This depends on comparing your loan interest rate with expected investment returns:

Consider prepaying if:

• Loan interest rate > expected investment returns
• Home loan at 9% vs. FD at 7% → prepay wins
• You want guaranteed savings (prepayment is risk-free)
• You're near retirement and want to be debt-free

Consider investing if:

• Expected returns significantly exceed loan rate
• Equity investments may give 12-15% over long term
• You have a long investment horizon (10+ years)
• Tax benefits on investments are valuable to you

Balanced approach: Do both! Prepay 50% of surplus, invest 50%.