Your monthly instalment, the real cost of interest, and how much a prepayment saves.
Your outstanding loan at the end of each year. It falls slowly at first, when most of each EMI is interest.
How much of each year's payments clears the loan, and how much is interest.
| Year | Principal | Interest | Total paid | Balance | Repaid |
|---|---|---|---|---|---|
| 1 | ₹99,511 | ₹4,21,182 | ₹5,20,694 | ₹49,00,489 | 2% |
| 2 | ₹1,08,307 | ₹4,12,387 | ₹5,20,694 | ₹47,92,181 | 4% |
| 3 | ₹1,17,881 | ₹4,02,813 | ₹5,20,694 | ₹46,74,300 | 7% |
| 4 | ₹1,28,300 | ₹3,92,394 | ₹5,20,694 | ₹45,46,000 | 9% |
| 5 | ₹1,39,641 | ₹3,81,053 | ₹5,20,694 | ₹44,06,359 | 12% |
| 6 | ₹1,51,984 | ₹3,68,710 | ₹5,20,694 | ₹42,54,375 | 15% |
| 7 | ₹1,65,418 | ₹3,55,276 | ₹5,20,694 | ₹40,88,957 | 18% |
| 8 | ₹1,80,039 | ₹3,40,655 | ₹5,20,694 | ₹39,08,918 | 22% |
| 9 | ₹1,95,953 | ₹3,24,741 | ₹5,20,694 | ₹37,12,965 | 26% |
| 10 | ₹2,13,274 | ₹3,07,420 | ₹5,20,694 | ₹34,99,691 | 30% |
| 11 | ₹2,32,125 | ₹2,88,569 | ₹5,20,694 | ₹32,67,566 | 35% |
| 12 | ₹2,52,643 | ₹2,68,051 | ₹5,20,694 | ₹30,14,923 | 40% |
| 13 | ₹2,74,974 | ₹2,45,720 | ₹5,20,694 | ₹27,39,949 | 45% |
| 14 | ₹2,99,279 | ₹2,21,415 | ₹5,20,694 | ₹24,40,670 | 51% |
| 15 | ₹3,25,733 | ₹1,94,961 | ₹5,20,694 | ₹21,14,937 | 58% |
| 16 | ₹3,54,525 | ₹1,66,169 | ₹5,20,694 | ₹17,60,412 | 65% |
| 17 | ₹3,85,862 | ₹1,34,832 | ₹5,20,694 | ₹13,74,550 | 73% |
| 18 | ₹4,19,968 | ₹1,00,726 | ₹5,20,694 | ₹9,54,582 | 81% |
| 19 | ₹4,57,090 | ₹63,604 | ₹5,20,694 | ₹4,97,492 | 90% |
| 20 | ₹4,97,492 | ₹23,202 | ₹5,20,694 | ₹0 | 100% |
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At 8.5% a year over 20 years, the EMI on a ₹50 lakh loan is about ₹43,391 a month. You would pay roughly ₹54 lakh in interest over the full tenure, so the total repaid is about ₹1.04 crore.
EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1), where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12 ÷ 100) and n is the number of monthly instalments.
Yes. A prepayment goes straight to the principal, so every later EMI carries less interest. On a ₹50 lakh, 20-year loan at 8.5%, paying ₹5,000 extra a month plus ₹5 lakh once at the end of year 5 saves about ₹20 lakh in interest and closes the loan more than six years early.
RBI rules do not allow banks to charge prepayment or foreclosure penalties on floating-rate home loans taken by individuals. Fixed-rate loans may carry a charge, so check your loan agreement.