Amortization Calculator

An amortization schedule is a month-by-month table that shows exactly how each EMI on your loan is split between interest and principal repayment, and how the outstanding balance falls to zero by the end of the tenure. This calculator builds that full schedule for any Indian home loan, car loan, personal loan or education loan — enter the loan amount, the annual interest rate and the tenure, and it computes your EMI, the total interest you will pay, and the complete repayment table. It is designed for borrowers who want to see where their money actually goes, compare loan offers, or test how prepayments shorten the loan.

What "amortization" actually means

Amortization is simply the process of repaying a loan in equal, scheduled instalments (EMIs) so that the debt is fully cleared at the end of the term, with nothing left over. Each EMI stays the same in rupee terms throughout a fixed-rate loan, but its internal split keeps changing: early EMIs are mostly interest, and later EMIs are mostly principal. The amortization schedule is the document that records this shift, instalment by instalment.

How the maths works

First the EMI (Equated Monthly Instalment) is computed using the standard reducing-balance formula that every Indian bank and NBFC uses:

EMI = P × r × (1 + r)n ÷ [(1 + r)n − 1]

Here P is the loan principal, n is the number of monthly instalments (years × 12), and r is the monthly interest rate, i.e. the annual rate divided by 12 and by 100. So a 9% per-annum home loan has a monthly rate of 9 ÷ 12 ÷ 100 = 0.0075. When the rate is 0%, the formula collapses to a plain EMI = P ÷ n.

Once the EMI is fixed, the schedule is built one month at a time using two simple steps:

• Interest for the month = Outstanding balance × monthly rate (Interest = Balance × r).
• Principal repaid = EMI − Interest, and the balance reduces by that principal portion.

Because interest is always charged on the reducing balance, the interest slice shrinks every month while the principal slice grows — even though the total EMI never changes. This is why a loan feels like it "isn't moving" in the early years and then drops sharply near the end.

Worked example (₹50 lakh home loan)

Suppose you take a ₹50,00,000 home loan at 8.5% per annum for 20 years (240 months). The EMI works out to roughly ₹43,391. In the very first month, interest is ₹50,00,000 × 8.5 ÷ 12 ÷ 100 ≈ ₹35,417, so only about ₹7,974 of that first EMI actually reduces your principal. By the final years, almost the entire EMI goes to principal. Over the full tenure you repay about ₹1.04 crore in total — roughly ₹54 lakh of interest on a ₹50 lakh loan. Seeing this split is exactly why an amortization schedule is so useful before you sign.

The power of prepayment

Use the Extra Monthly Payment field to model prepayment. Any rupee paid above the EMI goes straight to principal, which immediately cuts the interest charged in every following month and shortens the tenure. Because the saving compounds over the remaining years, even a modest top-up has an outsized effect — and a prepayment made in year 1 saves far more than the same amount in year 15, since early principal carries the most interest. The green panel above shows your exact interest saved and months knocked off.

Key factors, tips and India-specific notes

• Floating vs fixed rates. Most Indian home loans are floating, linked to an external benchmark (the RBI repo rate under the RLLR regime). When the rate changes, banks usually keep the EMI the same and adjust the tenure instead — so your real schedule can lengthen or shorten over time. This calculator assumes a single fixed rate for clarity.
• Prepayment charges. As per RBI rules, banks cannot levy foreclosure or prepayment penalties on floating-rate home loans taken by individuals. Fixed-rate loans and some personal/business loans may still carry charges, so confirm before prepaying.
• Tax angle. Under the old tax regime, home-loan principal repayment qualifies under Section 80C (up to ₹1.5 lakh) and interest under Section 24(b) (up to ₹2 lakh for a self-occupied house). The amortization split tells you how much of your yearly outgo is interest versus principal — useful at tax-filing time. The new regime does not allow these deductions on a self-occupied property.
• Compare on total interest, not just EMI. A longer tenure lowers the EMI but raises total interest dramatically. Always look at the "Total Interest" figure, not only the monthly affordability.
• Processing fees and insurance are charged separately and are not part of the EMI shown here; budget for them on top.

Common mistakes to avoid

• Assuming the principal and interest split is constant — it is not; only the EMI is constant.
• Confusing reducing-balance interest (used here and by all banks for EMIs) with flat-rate interest, which makes the effective cost look lower than it really is.
• Stretching the tenure purely to reduce the EMI, without realising how much extra interest that adds over 20–30 years.