• ₹1L
  • ₹10Cr
%
  • 0%
  • 20%
  • 1
  • 360

Your Monthly EMI is ₹13,432

 
 

 

 

Home-Loan EMI Calculator FAQs

What is a home loan EMI?

EMI is the abbreviation for Equated Monthly Instalment. Your home loan EMI is the monthly payment that you make to repay the home loan as per the amortisation schedule.

What is a home loan amortisation schedule?

A home loan amortisation schedule is a chart that shows the following:

  • Outstanding balance before payment of each EMI
  • The amount of EMI payable
  • The contribution towards the repayment of the principal
  • The contribution towards the interest component
  • The balance of loan outstanding after the payment of each EMI.

How are the principal and the interest due paid through EMIs?

ach EMI repays a part of the principal (or the amount borrowed) and the interest due on that principal outstanding. The proportion of each EMI used for repayment of the principal and the interest changes over time. The first few EMIs contribute more towards the payment of interest and less towards repayment of principal. But the later EMIs contribute more towards the repayment of the principal.

Banks and financial institutions generally calculate EMIs using a common mathematical formula. So, the EMI calculated and the amortisation schedule given by different banks and NBFCs will typically be similar for a given loan amount, tenure and interest rate. This also means that with the payment of each EMI, the pattern of reduction of the principal due generally follows a similar trend across all financial institutions.

Banks and financial institutions, in general, calculate EMI through a common mathematical formula. Thus, for a given loan amount, tenure and interest rate, the EMI calculated and the amortisation schedule offered by banks and Non-Banking Financial Companies (NBFCs) will typically be similar. This means that pattern of reduction of principal amount through payment of each EMI will typically follow similar trend across all financial institutions.

It is a well-known fact that the initial EMIs contribute more towards payment of interest due as compared to the principal amount. However, during the tenure of the loan, subsequent EMIs contribute more towards repayment of principal amount as compared to previous EMIs.

What is the benefit of calculating EMIs?

Since EMIs are the fixed amounts that you will need to pay the bank each month to repay your loan, calculating EMIs helps you plan your monthly budget.

What is the impact of part payments on your EMI?

Part payments towards your loan reduces the outstanding loan amount. This, in turn, reduces the amount of interest due. Your EMI remains unchanged even after you’ve made a part payment, but the proportion of the EMI utilised for the repayment of the principal and the interest changes. The amount going towards repaying the principal component in the EMI increases. Thus, the loan gets repaid faster.

How does the payment of EMI towards your home loan reduce your tax liability?

The provisions under the Indian Income Tax Act, 1961*, allow Indian nationals to claim income tax relief on the payments made towards repayment of home loans.
*Subject to Income Tax Act, 1961 and amendments thereto.

 Click here to access our home loan tax saving calculator

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