What is EMI and how does it work?

EMI (Equated Monthly Instalment) is a fixed amount you pay your lender every month until your loan is fully repaid. Every EMI has two components — principal (the actual loan amount borrowed) and interest (the lender's charge). In early months, most of the EMI goes toward interest. As the outstanding principal reduces, the interest portion shrinks and the principal portion grows. This is called the reducing balance method and is used by all Indian banks for home loans, car loans, personal loans, and education loans. The total EMI stays fixed throughout the tenure — only the internal split changes.

Is the EMI amount the same every month throughout the loan?

Yes — for any standard reducing-balance loan, the EMI stays exactly the same every month. What changes is the split between principal and interest, not the total amount. The EMI changes only in these situations: floating-rate loan where the RBI changes the repo rate and the bank revises your interest rate; balance transfer to another lender; or prepayment where you opt to reduce EMI rather than reduce tenure. For fixed-rate loans — common with personal loans and car loans — the EMI never changes regardless of market conditions.

What is the difference between reducing balance and flat rate EMI?

Reducing balance: Interest is calculated only on the outstanding principal each month. As you repay principal, the interest component falls progressively. All Indian banks and NBFCs use this method for home loans, car loans, and personal loans — and it is what this calculator uses. Flat rate: Interest is calculated on the original loan amount for the entire tenure, regardless of how much principal you have repaid. A 12% flat rate is roughly equivalent to a 21–22% reducing balance rate. Some vehicle finance companies and small consumer lending apps still advertise flat rates — always ask your lender which method they use before signing.

How accurate is this EMI calculator?

This calculator uses the standard amortization formula — the same formula used by every bank, NBFC, and housing finance company in India. For any fixed-rate loan with regular monthly payments, results will match your bank's loan statement. Minor differences of a few rupees can appear due to rounding — banks round EMI to the nearest rupee and small rounding differences accumulate over long tenures. Banks adjust the final instalment slightly to settle any remaining balance. For planning, comparison, and prepayment analysis, this calculator is fully accurate.

Can I use this calculator for home loan, car loan, and personal loan?

Yes — this calculator works for any loan type that uses the standard reducing-balance EMI formula. This includes: home loan (amount ₹5L–₹10Cr, rate 7.25%–9.5%, tenure 10–30 years); car loan (amount ₹1L–₹30L, rate 7.5%–13%, tenure 1–7 years); personal loan (amount ₹50K–₹40L, rate 10.5%–24%, tenure 1–5 years); education loan (disbursed amount at applicable rate for repayment tenure after moratorium); gold loan EMI-based structures; and business loans or loans against property. Simply enter your loan amount, interest rate, and tenure — the calculator instantly shows your EMI, total interest, and full amortization schedule regardless of loan type.

Should I reduce EMI or reduce tenure after a prepayment?

For maximum interest savings, always choose to reduce tenure. When you keep the EMI the same and shorten the remaining loan period, you repay principal faster — which eliminates future interest on that principal for all remaining months. Choose to reduce EMI only when monthly cash flow is genuinely strained — for example after a job change, large medical expense, or loss of a second income source. Quick rule: stable income with long tenure remaining — reduce tenure. Cash flow pressure — reduce EMI. Use the prepayment feature in this calculator to see the exact interest saved and months closed early for your specific loan before making the decision.

How much EMI can I afford based on my salary?

Your total monthly EMI obligations across all loans should not exceed 40–50% of your net take-home salary. Banks typically cap loan eligibility at 50–55% of gross income, but staying under 40% gives room for emergencies and investments. Quick reference: ₹40,000/month take-home — total EMIs under ₹16,000–20,000; ₹75,000/month — under ₹30,000–37,500; ₹1,00,000/month — under ₹40,000–50,000; ₹1,50,000/month — under ₹60,000–75,000. Important: this 40–50% includes ALL active EMIs — home loan, car loan, personal loan, credit card EMIs, and buy-now-pay-later plans combined.

What are the current loan interest rates in India in April 2026?

Following the RBI's rate cuts totalling 125 basis points through 2025 (repo rate now at 5.25%), lending rates have come down across loan types. As of April 2026: home loan 7.25%–9.5% p.a. (SBI from 7.25%, ICICI from 7.45%, HDFC from 7.75%); car loan 7.5%–13% p.a.; personal loan 10.5%–24% p.a. (unsecured, CIBIL score above 750 significantly reduces rate); education loan 8.5%–15% p.a.; gold loan 7.5%–17% p.a. Final rate depends on CIBIL score, loan amount, employment type, and lender. Always verify the current rate directly with your lender before applying.

Does the RBI repo rate change affect my existing loan EMI?

It depends on how your loan is structured. The RBI held the repo rate at 5.25% in April 2026 after cutting it by 125 basis points through 2025. The next MPC meeting is June 3–5, 2026. EBLR-linked floating-rate loans (all new home loans since Oct 2019, many car loans): rate changes flow through within 1–3 months — fastest transmission. Most home loan borrowers on EBLR should already see lower EMIs from the 2025 cuts. MCLR-linked loans (older home loans pre-2019, many personal and car loans): changes take 6–12 months to reflect — consider asking your bank to switch to EBLR. Fixed-rate loans (most personal loans, some car loans): rate is locked for the agreed period and RBI changes have zero effect during that period.

Is EMI tax deductible in India for FY 2025–26?

Tax deductibility depends on loan type and chosen tax regime. The new tax regime is the default from AY 2025–26. Home loan old regime only: principal up to ₹1.5L/year under Section 80C, interest up to ₹2L/year under Section 24(b) for self-occupied property. For rented-out property: full interest deductible under Section 24(b) with no upper cap in both regimes. Home loan new regime: no deduction on principal (80C) or interest (24(b)) for self-occupied property. New regime now offers standard deduction of ₹75,000 and zero tax up to ₹12.75 lakh for salaried individuals. Car loan: no deduction in either regime for personal use; interest deductible as business expense if vehicle used for business. Personal loan: no deduction for personal use; may be deductible if used for home renovation or business — consult a CA. Education loan: full interest deductible under Section 80E for 8 consecutive years in both old and new regimes — no upper limit.

How can I reduce my loan EMI without prepaying?

Several options can reduce your EMI without a lump-sum prepayment: 1. Improve CIBIL score before applying — a score above 750 can reduce home loan rate by 0.5%–1.5%, saving lakhs over 20 years. 2. Extend the tenure — longer tenure lowers monthly EMI but increases total interest paid. 3. Make a larger down payment — every extra rupee in down payment reduces the borrowed amount at full interest for the full tenure. 4. Balance transfer to a lower rate — if your existing rate is 0.5%+ higher than current market rates and you have 10+ years remaining, a balance transfer usually makes financial sense after accounting for processing fees. 5. Switch from MCLR to EBLR — for older MCLR-linked home loans, switching to EBLR can significantly reduce your rate at the current 5.25% repo rate. A nominal conversion fee around ₹5,000 typically applies.

EMI Calculator – Home, Car & Personal Loan

Last updated: May 30, 2026 Rates applicable: 2026 Sources: RBI, Income Tax India, NHB Fact-checked against official sources

Definition All Loan Types

What Is an EMI? — Complete Guide for 2026

Quick summary

EMI = Equated Monthly Instalment — a fixed payment made every month until the loan is fully repaid.
Every EMI contains two parts: principal repayment and interest charge.
Early EMIs are interest-heavy; later EMIs are principal-heavy — this is the reducing balance method.
Prepaying early saves far more interest than prepaying in the final years.
Home loan interest deduction under Section 24(b) is available only under the old tax regime for self-occupied property.

EMI stands for Equated Monthly Instalment. It is the fixed amount you pay your lender every single month until your loan is fully repaid. The word "equated" is the key — the total payment stays constant every month, even though what is happening inside that payment changes continuously over the loan tenure.

In the first few months of a loan, a large portion of your EMI goes toward paying interest. Month by month, as the outstanding principal reduces, the interest component shrinks and the principal repayment portion grows. By the final year, almost your entire EMI is going toward retiring the principal. This is called an amortizing loan, and it is how every home loan, car loan, and personal loan issued by a regulated lender in India works.

This structure has a critical practical implication: every rupee you prepay early eliminates future interest on that rupee for all remaining months. Prepaying ₹1 lakh in year two of a 20-year home loan saves far more than prepaying ₹1 lakh in year sixteen — because in year two, that ₹1 lakh would have compounded interest against you for 18 more years. Our EMI calculator shows you this effect in real time through the interest saved figure and the revised amortization schedule.

✅ Why EMI-based loans work for you

Fixed payment — easy to budget monthly
Enables large purchases (home, car) upfront
Home loan interest deductible (old regime)
Education loan interest deductible (both regimes)
Floating-rate EMIs fall when RBI cuts rates
Prepayment allowed on floating-rate loans (no penalty)

⚠️ What to watch out for

Total repayment often 1.5–2× the borrowed amount
Early EMIs are mostly interest — principal barely moves
Fixed-rate loans have prepayment penalties (1–2%)
Missing EMIs damages your CIBIL score significantly
Flat-rate loans charge interest on full principal throughout
Over-borrowing locks disposable income for years

Formula

The EMI Formula Explained — With a Worked Example

Every bank, NBFC, and housing finance company in India uses the same standard reducing-balance formula. There is no bank-specific variation — the mathematics is identical across every regulated lender:

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

P = Principal (loan amount) | r = Monthly interest rate (annual rate ÷ 12 ÷ 100) | n = Total number of monthly instalments

What each variable means

Variable	What it is	Example
P	Principal — the original loan amount you borrow	₹30,00,000
r	Monthly rate = Annual rate ÷ 12 ÷ 100	8.5% p.a. → 0.085 ÷ 12 = 0.007083
n	Total monthly instalments over the full tenure	20 years = 240 months
EMI	Your fixed monthly payment (the result)	Calculated below

Worked example — home loan at 8.5%

Step-by-step

Loan: ₹30 lakh · Rate: 8.5% p.a. · Tenure: 20 years (240 months)

Monthly rate (r): 8.5 ÷ 12 ÷ 100 = 0.007083

Formula: 30,00,000 × 0.007083 × (1.007083)²⁴⁰ ÷ [(1.007083)²⁴⁰ − 1]

(1.007083)²⁴⁰ = 5.3133

Monthly EMI ≈ ₹26,035 · Total Interest ≈ ₹32.48 lakh · Total Outgo ≈ ₹62.48 lakh

You borrow ₹30 lakh and repay over ₹62 lakh in total. That is the true cost of a 20-year home loan — not ₹30 lakh. This is not unusual and not a scam; it is simply how compound interest works against you when you are a borrower. Reducing the tenure or prepaying early are the two most effective tools to reduce this gap.

EMI vs EPI — what is the difference?

EMI (Equated Monthly Instalment) keeps the total monthly payment fixed. The interest component is higher in early months and falls over time as the principal is repaid. This is the reducing balance method and is used by all Indian banks and regulated NBFCs.

EPI (Equated Principal Instalment) keeps the principal component fixed every month, while the interest component decreases. Your total payment is higher in early months and gradually reduces. EPI results in lower total interest paid over the tenure, but the higher early payments make it less practical for most salaried borrowers. It is used by some cooperative banks and select NBFCs. This calculator uses the standard EMI (reducing balance) method, which matches every major Indian bank's loan statement.

Key Takeaways — EMI Formula

The formula is universal — SBI, HDFC, ICICI, and every regulated lender uses the same calculation.
Small rounding differences (a few rupees per month) are normal — banks adjust the final instalment.
The interest rate matters far more than the tenure for the total cost of the loan.
Use the calculator above to model different combinations of amount, rate, and tenure instantly.

2026 Indicative

Home, Car & Personal Loan EMI — Key Differences in 2026

The EMI formula is identical across all loan types. What differs significantly is the interest rate range, typical tenure, tax treatment, and prepayment rules. Here is a practical overview:

🏠 Home Loan 7.25% – 9.5%

Typical Tenure

5 – 30 years

Tax Benefit

Sec 80C + 24(b)

Principal: Up to ₹1.5L/yr under Sec 80C (old regime only). Interest: Up to ₹2L/yr under Sec 24(b) for self-occupied property (old regime only). For a let-out property, full interest is deductible under both regimes. No prepayment charges on floating-rate home loans — mandated by RBI.

🚗 Car Loan 7.5% – 13%

Typical Tenure

1 – 7 years

Tax Benefit

None (personal use)

Interest is deductible as a business expense if the vehicle is used for business purposes — consult a CA. A car depreciates the moment it leaves the showroom — keep LTV below 80% of on-road price. Prepayment charges of 1–5% are common.

💳 Personal Loan 10.5% – 24%

Typical Tenure

1 – 5 years

Tax Benefit

None

No collateral required — fastest disbursal. Rate is driven heavily by your CIBIL score. A score of 750+ can reduce your rate by 2–3%. Pre-closure charges up to 5% of outstanding principal are common after a lock-in period.

🎓 Education Loan 8.5% – 15%

Typical Tenure

Up to 15 years

Tax Benefit

Sec 80E — both regimes

Section 80E interest deduction is available under both old and new tax regimes — one of the very few deductions retained under the new regime. Interest fully deductible for 8 consecutive years from the year repayment begins. Moratorium: course duration + 1 year (or 6 months post-employment).

🥇 Gold Loan 7.5% – 17%

Typical Tenure

3 months – 3 years

Tax Benefit

None (personal)

Fastest disbursal — often within the hour. Bullet repayment option available (pay principal at maturity). LTV capped at 75% of gold value per RBI guidelines. Watch for processing fees and auction charges if payments are missed.

🏢 Loan Against Property 8.5% – 13%

Typical Tenure

5 – 15 years

Tax Benefit

Business use only

Can borrow 50–60% of property value. Lower rate than personal loan due to collateral. Interest may be deductible if used for business — consult a CA. Good option for high-value requirements without liquidating assets.

Tax regime note (FY 2026–2027): The new tax regime is the default for salaried individuals from AY 2027–2028 onward. Home loan deductions under Section 80C (principal) and Section 24(b) (interest on self-occupied property) are available only under the old regime. Section 80E (education loan interest) is available under both regimes. Always verify with a Chartered Accountant before deciding your tax regime.

Comparison

Reducing Balance vs Flat Rate — A Trap Many Borrowers Fall Into

Not all interest rates are created equal. Understanding the difference between a reducing balance rate and a flat rate can save you from a surprisingly expensive mistake.

Feature

Reducing Balance

Flat Rate

How interest is calculated

FeatureHow interest is calculated

Reducing BalanceOn outstanding principal each month

Flat RateOn original loan amount throughout

Who uses it

FeatureWho uses it

Reducing BalanceAll banks, HFCs, regulated NBFCs

Flat RateSome vehicle finance companies, consumer durable apps, informal lenders

True cost comparison

FeatureTrue cost comparison

Reducing Balance12% reducing ≈ 12% effective

Flat Rate12% flat ≈ 21–22% reducing effective

This calculator uses

FeatureThis calculator uses

Reducing Balance✅ Yes — standard reducing balance

Flat Rate❌ No

If a lender quotes you a flat rate, always ask them to convert it to the equivalent reducing balance rate before comparing. The RBI requires all regulated lenders to disclose the Annual Percentage Rate (APR), which reflects the true cost of the loan — use that number for comparisons.

Prepayment

Prepayment — The Single Most Powerful Tool to Save on Your Loan

Most borrowers treat prepayment as something to think about later. That is one of the most expensive financial decisions you can make passively. Here is a concrete illustration of what early prepayment actually does:

The prepayment effect — ₹50 lakh home loan at 8.5% for 20 years

Base case: EMI ₹43,391 · Total interest payable: ₹54.14 lakh

Scenario A — Extra ₹5,000/month from month 1: Loan closes in 15 years 2 months · Interest: ₹37.9 lakh · You save ₹16.24 lakh

Scenario B — ₹2 lakh lump sum at end of year 3: Loan closes ~8 months early · Interest saved: ~₹3.8 lakh

An extra ₹5,000/month — less than a dinner for two at a mid-range restaurant, every month — saves over ₹16 lakh across the life of a home loan.

Reduce tenure or reduce EMI after prepayment?

When you make a prepayment, your bank will ask whether you want to reduce your remaining tenure (keep EMI the same) or reduce your monthly EMI (keep tenure the same). For maximum interest savings, always choose to reduce tenure. Keeping the EMI the same means you continue repaying principal at the same aggressive rate, closing the loan much faster and eliminating interest for all those extra months.

Reduce the EMI only when your monthly cash flow is genuinely strained — after a job change, large medical expense, or loss of a second income. Lower EMI frees up cash immediately but saves significantly less total interest.

Prepayment rules — what RBI says

RBI mandate: No prepayment penalty is allowed on floating-rate home loans — banks cannot charge you for prepaying. For fixed-rate loans (common in personal loans and some car loans), lenders may charge 1–5% of the outstanding principal as a prepayment fee. Always check your loan agreement's prepayment clause before making a large payment.

📅

Annual Bonus → Loan First

Put your annual bonus, incentive, or tax refund toward the loan principal in year 1 or 2 for maximum impact. Prepaying in year 15 of a 20-year loan saves a fraction of what the same amount saves in year 2.

💰

FD vs Prepayment Math

If your home loan rate is 9% and your best FD offers 7.5%, the math favors prepayment — you are effectively earning a guaranteed 9% on the prepaid amount. Only hold back if the FD is tax-free (like PPF) or if you have no emergency fund.

📊

Monthly Extra EMI Strategy

Adding a small fixed monthly extra amount (₹2,000–₹10,000) is the most consistent prepayment strategy for salaried professionals. It requires no annual decision and automatically accelerates payoff.

🧮

Model Before You Pay

Use the prepayment section of this calculator to compare exact interest saved and tenure reduction for any prepayment amount before committing. The results often surprise people — even small prepayments have outsized effects early in the loan.

EMI Tips

6 Practical Ways to Reduce Your Loan EMI Burden

📈

Build Your Credit Score First

A CIBIL score above 750 can reduce your home loan rate by 0.5%–1.5%. On a ₹50 lakh loan over 20 years, that is ₹6–18 lakh in savings. Pay all credit card bills and existing EMIs on time for 6 months before applying for a new loan.

⏳

Extend Tenure Strategically

Stretching from 15 to 20 years reduces the EMI by about 15%, improving monthly cash flow. You pay more total interest, but only use this if the extra cash flow is genuinely needed or if you plan to prepay aggressively and close earlier anyway.

💰

Increase Your Down Payment

Every extra rupee in down payment is a rupee you never pay interest on for the full tenure. Raising down payment from 20% to 30% on a ₹1 crore property reduces borrowing by ₹10 lakh — saving substantial interest over 20 years.

🔄

Balance Transfer to a Lower Rate

If your current lender charges 9.5% but another offers 8.5% and you have 10+ years remaining, transferring makes strong financial sense even after processing fees. Calculate the break-even point — savings usually exceed fees within 6–18 months.

🔗

Switch MCLR to EBLR

If you have an older MCLR-linked home loan, ask your bank to switch to an EBLR (repo rate-linked) rate. With the RBI repo rate at 5.25%, EBLR-linked rates are meaningfully lower. A nominal conversion fee (typically ₹3,000–₹5,000) usually applies.

🤝

Add a Co-Applicant

Adding your spouse or parent as a co-applicant strengthens the income profile for the bank, often unlocking a lower rate or higher eligibility. Many banks offer women borrowers a 0.05–0.10% concession on home loan rates as well.

Calculator Guide

How to Use This EMI Calculator

The calculator is designed to give you answers in under 30 seconds — no registration, no data saved anywhere.

Basic EMI calculation

Enter your loan amount using the slider or by typing directly in the input box.
Set the annual interest rate your lender has quoted you.
Enter the tenure — in years or months (the calculator converts automatically).
Your EMI, total interest, and total repayment update instantly with every change.
Switch between the chart, yearly, and monthly views to explore the full amortization schedule.

Using the prepayment feature

Toggle on "Add Prepayment" to unlock three modes. For monthly extra payments, set the amount and the month you plan to start — useful if you expect a salary hike after a probation period. For yearly prepayments, set the annual amount and the starting year — ideal for bonus-driven prepayment plans. For lump-sum payments, add individual entries at any month — one for a FD maturity in month 24, another for a property sale in month 60. Each entry stacks, and the "Interest Saved" and "Months Closed Early" figures update in real time.

Reading the amortization schedule

The monthly view shows a row-by-row breakdown of every EMI — principal paid, interest paid, prepayment (if any), and outstanding balance. Prepayment months are highlighted. The yearly view summarises the same data by financial year — useful for estimating Section 24(b) interest deduction for home loans. The chart view gives an at-a-glance picture of how principal repayment accelerates in the second half of the loan.

FAQ

EMI Calculator — Frequently Asked Questions (2026)

EMI (Equated Monthly Instalment) is a fixed amount you pay your lender every month until the loan is fully repaid. Every EMI contains two components — principal (actual loan amount being repaid) and interest (the lender's charge for lending you money).

In early months, most of the EMI goes toward interest. As the outstanding principal falls month by month, the interest portion shrinks and the principal portion grows. This is the reducing balance method, used by all Indian banks and regulated NBFCs for home loans, car loans, personal loans, and education loans.

The total EMI stays fixed throughout the loan tenure — only the internal split changes. This predictability is what makes EMIs easy to budget for.
Yes — for any standard reducing-balance loan, the EMI stays exactly the same every month. The split between principal and interest changes, but the total amount does not.

The EMI amount changes only in these situations: floating-rate loan — if the RBI changes the repo rate, your bank may revise your interest rate, altering either your EMI or remaining tenure. Balance transfer — moving to another lender resets the EMI at the new rate. Prepayment with EMI reduction — if you prepay and opt to reduce EMI rather than tenure, your monthly amount falls.

For fixed-rate loans — most personal loans and many car loans — the EMI never changes regardless of market conditions.
This calculator uses the same standard amortization formula used by every bank, NBFC, and housing finance company in India. For any fixed-rate loan with regular monthly payments, the results match your bank's loan statement.

Minor differences of a few rupees can appear due to rounding — banks round the EMI to the nearest rupee, and small rounding differences accumulate over long tenures (e.g., 240 months). Banks adjust the final instalment slightly to settle any remaining balance. This is completely normal.

For planning, comparing loan options, and modelling prepayment scenarios, this calculator is fully accurate.
Yes — this calculator works for any loan that uses the standard reducing-balance EMI formula, which includes home loans, car loans, personal loans, education loans, gold loans (EMI-based), business loans, and loans against property. Simply enter your loan amount, interest rate, and tenure — the calculator instantly shows your EMI, total interest, and full amortization schedule regardless of loan type.
For maximum interest savings, always choose to reduce tenure. Keeping the EMI the same and shortening the loan period eliminates months of future interest on the outstanding principal — the savings compound significantly over long tenures.

Choose to reduce EMI only when monthly cash flow is genuinely strained — after a job change, large expense, or loss of income. Lower EMI frees up cash immediately but saves significantly less total interest over the loan life.

Use the prepayment feature in this calculator to see the exact interest saved and months closed early for your specific scenario before deciding.
The widely recommended rule is that your total monthly EMI obligations across all active loans should not exceed 40–50% of your net take-home salary. Banks typically cap loan eligibility at 50–55% of gross income, but staying below 40% leaves room for emergencies, investments, and lifestyle expenses.

Quick reference: ₹40,000/month take-home → total EMIs under ₹16,000–20,000. ₹75,000/month → under ₹30,000–37,500. ₹1,00,000/month → under ₹40,000–50,000. ₹1,50,000/month → under ₹60,000–75,000.

This includes all active EMIs — home loan, car loan, personal loan, credit card EMIs, and BNPL plans combined.
Following RBI rate cuts totalling 125 basis points through 2025 (repo rate now at 5.25%), home loan rates have come down meaningfully. As of 2026, indicative home loan rates are: SBI from 7.25%, ICICI from 7.45%, HDFC from 7.75%. Final rates depend on your CIBIL score, loan amount, employment type (salaried vs self-employed), and whether you are a woman borrower (additional 0.05–0.10% concession at many banks). Always verify the current rate directly with your lender before applying.
It depends on how your loan is structured. The RBI repo rate is currently at 5.25% (as of 2026) after cuts totalling 125 bps through 2025.

EBLR-linked (repo-linked) floating-rate loans — all new home loans since October 2019: Rate changes flow through within 1–3 months of any RBI move. These borrowers should already see lower EMIs from the 2025 cuts.

MCLR-linked loans — older home loans pre-2019, many car and personal loans: Changes take 6–12 months to reflect. If your EMI has not changed since 2025, check your reset date and consider asking your bank to switch to EBLR.

Fixed-rate loans — most personal loans, some car loans: Rate is locked for the agreed period. RBI changes have zero effect during the fixed period.
Tax deductibility depends on the loan type and your chosen tax regime for FY 2026–2027.

Home Loan — Old regime only: Principal repayment: up to ₹1.5 lakh/year under Section 80C. Interest paid on self-occupied property: up to ₹2 lakh/year under Section 24(b). For rented-out property, full interest is deductible under Section 24(b) in both regimes with no upper cap.

Home Loan — New regime (default from AY 2027–2028): No deduction on principal (80C) or interest (24b) for self-occupied property.

Car Loan: No deduction for personal use in either regime. Interest deductible as business expense if used for business.

Personal Loan: No deduction for personal use. May be deductible if used for home renovation or business — consult a CA.

Education Loan: Full interest deductible under Section 80E for 8 consecutive years — available in both regimes with no upper limit. One of the very few deductions retained under the new regime.
Reducing balance: Interest is calculated only on the outstanding principal each month. As you repay principal, the interest component falls progressively. All Indian banks and regulated NBFCs use this method. This is what our calculator uses.

Flat rate: Interest is calculated on the original loan amount for the entire tenure, regardless of how much you have repaid. A 12% flat rate is roughly equivalent to a 21–22% reducing balance rate — dramatically more expensive than it appears.

Some vehicle finance companies, consumer durable loan apps, and small informal lenders still advertise flat rates. Always ask which method is being used and request the equivalent reducing balance rate before signing.
Missing an EMI has several consequences that compound quickly. Credit score impact: A single missed EMI is reported to credit bureaus (CIBIL, Experian, CRIF) after 30 days. Even one missed payment can drop your CIBIL score by 50–100 points — affecting your ability to get loans or credit cards for months or years.

Late payment charges: Banks typically charge 2–3% per annum on the overdue amount, plus a flat late fee of ₹200–₹1,000 per missed EMI depending on your lender's terms.

Compound effect on interest: If the missed EMI causes your loan to go past due, interest continues to accrue on the full outstanding balance including the missed portion.

If you anticipate difficulty paying, contact your bank proactively before the due date. Most banks will offer a short moratorium or restructuring rather than report a default — especially for home loans.
The amortization schedule in this calculator breaks down every EMI into its principal and interest components by month and by year. For tax planning purposes under the old regime:

Section 24(b) — interest deduction: Add up the "Interest Paid" column for April to March (the Indian financial year) to find your annual interest outgo. The amount up to ₹2 lakh on a self-occupied property is deductible. For rented-out property, the full amount is deductible.

Section 80C — principal deduction: Add up the "Principal Paid" column for the same April–March period. This, combined with your other 80C investments (PPF, ELSS, insurance), is deductible up to ₹1.5 lakh.

Switch to the "Yearly" view in the calculator and match it against your actual EMI payment dates for the most accurate financial-year totals.

Disclaimer: Results from this calculator are for informational and educational purposes only. Interest rates, tax deduction limits, prepayment rules, and loan eligibility criteria vary by lender and are subject to change. Tax information is indicative for FY 2026–2027 (AY 2027–2028) — always verify with your lender and a qualified Chartered Accountant before making financial decisions. This tool does not constitute financial or legal advice. Last updated: May 30, 2026.