₹24,797/mo · 8.5% · 10 yrs
EMI calculations are indicative and based on the reducing balance method. Actual EMI may vary based on the lender's terms, processing fees, and prepayment conditions. This tool does not constitute financial advice. Consult your bank or financial advisor before making borrowing decisions.
Calculations are indicative. Actual EMI may vary based on lender policies, processing fees, and GST.
| Year | Principal | Interest | Balance |
|---|---|---|---|
| Yr 1 | ₹1.3 L | ₹1.6 L | ₹18.7 L |
| Yr 2 | ₹1.4 L | ₹1.5 L | ₹17.2 L |
| Yr 3 ↑ | ₹1.6 L | ₹1.4 L | ₹15.7 L |
| Yr 4 | ₹1.7 L | ₹1.3 L | ₹13.9 L |
| Yr 5 | ₹1.9 L | ₹1.1 L | ₹12.1 L |
| Yr 6 | ₹2.0 L | ₹94,962 | ₹10.1 L |
| Yr 7 | ₹2.2 L | ₹77,054 | ₹7.9 L |
| Yr 8 | ₹2.4 L | ₹57,563 | ₹5.5 L |
| Yr 9 | ₹2.6 L | ₹36,349 | ₹2.8 L |
| Yr 10 | ₹2.8 L | ₹13,259 | — |
↑ Year 3 — principal repayment overtakes interest
EMI (Equated Monthly Installment) uses the reducing balance method:
EMI = P × r × (1+r)^n / ((1+r)^n − 1)
Where P is the principal, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the total number of monthly installments.
In the early years of a loan, a larger portion of your EMI goes toward interest. As you continue paying, the principal component gradually increases. The point where principal repayment exceeds interest is a significant milestone — for a 20-year home loan at 8.5%, this typically happens around year 12.
EMI is calculated using the reducing balance method: EMI = P × r × (1+r)^n / ((1+r)^n - 1), where P is the principal loan amount, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the total number of monthly installments.
In the flat rate method, interest is calculated on the full original loan amount throughout the tenure. In the reducing balance method (used by most banks in India), interest is calculated on the outstanding principal, which decreases with each EMI payment. The reducing balance method results in lower total interest paid.
For a typical home loan at 8–9% interest, principal repayment exceeds interest around the midpoint of the loan tenure. For a 20-year home loan at 8.5%, this crossover typically happens around year 12. Before this point, most of your EMI goes toward interest.
As of FY 2025-26, home loan interest rates in India typically range from 8.25% to 9.5% depending on the lender, loan amount, and borrower profile. SBI, HDFC, and ICICI Bank offer rates starting around 8.25–8.50% for salaried individuals.
Yes, most education loans include a moratorium period (course duration + 6–12 months after completion) during which you don't need to make EMI payments. Interest may still accrue during this period.
Yes, under Section 80E of the Income Tax Act, interest paid on education loans is fully deductible (no upper limit) for up to 8 years starting from the year you begin repayment. This applies to loans for higher education in India or abroad.