Calculate the monthly instalment on a loan, the total interest you will pay across its life, and how each year's payments split between interest and principal.
EMI = P × r × (1 + r)^n / ((1 + r)^n − 1), where P is the principal, r the monthly interest rate, and n the number of monthly instalments. The amortisation schedule then splits each payment: early instalments are mostly interest, and the principal share rises as the outstanding balance falls.
Interest each month is charged on the outstanding balance, which is at its highest at the start. On a 20-year home loan the first few years are predominantly interest, which is exactly why prepaying early saves far more than prepaying later.
It lowers the monthly EMI but raises the total interest, often substantially. Stretching a home loan from 15 to 20 years reduces the monthly burden but can add years of interest to the total cost.
Compare the loan rate against the return you realistically expect after tax. Prepaying gives a guaranteed, risk-free saving equal to the interest rate; investing may beat it but is not guaranteed. Home loan interest deductions under the old tax regime can also shift the comparison.
This calculator is for information only and is not investment, tax, or financial advice. Figures are estimates based on the assumptions you enter and are not a guarantee of future returns. Consult a SEBI-registered adviser or a qualified tax professional before acting.