Question 1

What is a loan amortisation schedule in India?

Accepted Answer

A loan amortisation schedule is a complete table showing every EMI payment over the life of a loan — broken down into principal repaid, interest charged, and outstanding balance after each payment. Indian banks use the reducing balance method: interest is calculated on the outstanding principal each month. The schedule reveals that early EMIs are mostly interest (80%+ for a 20-year home loan), and principal repayment accelerates over time.

Question 2

How is EMI calculated in the reducing balance method?

Accepted Answer

EMI = P × r × (1+r)ⁿ / [(1+r)ⁿ − 1]. Where P = principal loan amount, r = monthly interest rate (annual rate ÷ 12 ÷ 100), n = total number of monthly payments. Each month: Monthly Interest = Outstanding Balance × r; Monthly Principal = EMI − Monthly Interest; New Balance = Old Balance − Monthly Principal. This is the method mandated by RBI for all bank loans in India.

Question 3

Why does early EMI pay more interest than principal?

Accepted Answer

In the reducing balance method, interest is charged on the outstanding loan balance. At the start, the balance is highest — so interest charged is highest. As you pay EMIs, the balance reduces and interest portion decreases while principal portion increases. For a 20-year home loan: Month 1 EMI of ₹26,035 = ₹21,250 interest + ₹4,785 principal. By Month 240: same EMI = ₹184 interest + ₹25,851 principal. This is why prepayment in early years saves the most — you reduce the high-interest-charging balance.

Question 4

How much does extra monthly payment save on Indian home loan?

Accepted Answer

Extra ₹5,000/month on ₹30L home loan @ 8.75% for 20 years: saves ₹8.7L in interest and closes loan 4.2 years early. Extra ₹10,000/month: saves ₹14.2L and closes 7.8 years early. The savings are dramatically higher if extra payments start from early years — the same extra payment from Year 10 saves only 40–50% of what it would save from Year 1.

Question 5

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

Accepted Answer

Flat rate: interest calculated on original loan amount for entire tenure. Reducing balance: interest calculated on outstanding balance each month. A 12% flat rate loan = approximately 21.5% effective annual rate for 5 years. RBI mandates banks quote reducing balance rates. Always confirm with lender. Never compare flat rate from NBFC with reducing balance rate from bank — they are not equivalent. Demand APR (Annual Percentage Rate) for fair comparison.

Question 6

How to use home loan amortisation for Section 24(b) tax deduction?

Accepted Answer

From your amortisation schedule, note the 'Interest' column for each month in the financial year (April to March). Sum of monthly interest paid = your annual home loan interest for Section 24(b) deduction. Self-occupied property: deduct up to ₹2L/year. Let-out property: unlimited deduction. Your bank issues an annual interest certificate by April 30 confirming the exact interest paid. Cross-check with our schedule — minor differences may occur if bank recalculates due to rate changes.

Question 7

What happens to amortisation schedule when interest rate changes?

Accepted Answer

For floating rate loans (RLLR-linked): when RBI changes repo rate, your EMI or tenure changes. Banks typically send a revised amortisation schedule. If EMI is kept constant: tenure changes. If tenure is kept constant: EMI changes. Always request updated schedule after each rate change. This calculator shows the schedule at a fixed rate — for floating rate scenarios, recalculate after each rate revision with the new outstanding balance.

Question 8

How to read an amortisation table?

Accepted Answer

Each row = one EMI payment. Columns: (1) Month/date; (2) EMI amount; (3) Principal portion of EMI; (4) Interest portion of EMI; (5) Outstanding balance after payment; (6) Cumulative principal paid; (7) % of loan repaid. Key observations: balance column shows how much you still owe; interest column shows cost of borrowing each month; principal + interest = EMI (constant for fixed rate); as rows progress, principal rises and interest falls.

Question 9

How many months does it take to pay off 50% of home loan principal?

Accepted Answer

For a 20-year home loan at 8.75%: it takes approximately 14.5 years (174 months) to repay just 50% of the principal. This is the power of reducing balance amortisation — principal builds slowly in early years. For a 10-year home loan at same rate: 50% principal repaid by ~7.5 years. For personal loans (3-5 years): 50% repaid by ~1.5-2 years. Use our schedule above to find the exact month when you hit the 50% milestone.

Question 10

Is it better to prepay loan or invest the extra money?

Accepted Answer

Comparison for home loan at 8.75%: Prepaying = guaranteed 8.75% return (after-tax for non-metro, adjusted for 24(b) deduction for first ₹2L interest). Investing in Nifty 50 index fund = expected 12% CAGR (not guaranteed). Decision: If home loan interest > your expected investment return post-tax → prepay. For most salaried Indians in 30% bracket: effective home loan rate = 8.75% × (1-0.3) = 6.1% (due to 24(b) deduction). Nifty 50 at 12% CAGR post-tax ≈ 10.5% → investing wins over prepaying home loan.

Question 11

What is the amortisation schedule for ₹30 lakh home loan?

Accepted Answer

₹30L home loan at 8.5% for 20 years: EMI = ₹26,035/month. Year 1: interest paid ₹2,49,876, principal paid ₹62,544. Year 5: outstanding balance ₹26.2L (only ₹3.8L principal repaid). Year 10: outstanding balance ₹20.8L. Year 15: outstanding balance ₹12.5L. Year 20: loan closed. Total interest paid: ₹32,48,400 (108% of original loan). Use the calculator above with your exact loan details.

Question 12

How to get loan amortisation schedule from bank in India?

Accepted Answer

SBI: YONO app → Loan Accounts → Repayment Schedule. HDFC Bank: NetBanking → Loans → Statement. ICICI Bank: iMobile Pay → Loan → Amortisation Schedule. Axis Bank: Axis Mobile → Loans. Kotak: 811 app → Loans. Most banks provide this in the original sanction letter and also on their digital platforms. Annual interest certificate (for 24(b) tax claim): available by April 30 on all bank apps. If not available digitally: visit branch with loan account number.

Question 13

Does amortisation schedule change after balance transfer?

Accepted Answer

Yes — after balance transfer (switching home loan from one bank to another), a completely new amortisation schedule starts from the transferred balance at the new interest rate. Example: ₹30L loan, after 5 years outstanding = ₹26.2L transferred to new bank at lower rate. New amortisation schedule runs from ₹26.2L for the remaining 15 years at new rate. Request new amortisation schedule from the new bank at the time of transfer confirmation. Our calculator handles this — enter outstanding balance as loan amount and remaining tenure.

Question 14

What is partial prepayment in loan amortisation?

Accepted Answer

Partial prepayment = paying extra principal amount (beyond regular EMI) on an ad-hoc basis. Effect on amortisation: reduces outstanding balance; bank recomputes remaining schedule at same EMI with shorter tenure (or same tenure with lower EMI). For floating rate home loans from banks: RBI mandates zero prepayment penalty. For fixed rate or NBFC loans: prepayment charge may apply (2–5% of prepaid amount). Always confirm prepayment penalty terms before making large ad-hoc payments.

Question 15

What is accelerated loan repayment using amortisation schedule?

Accepted Answer

Accelerated repayment means systematically paying more than the minimum EMI to close the loan early. Strategies: (1) Extra fixed monthly amount (e.g., ₹5,000 extra every month — use Extra EMI field above); (2) Annual lump sum prepayment using bonus (e.g., one extra EMI every Diwali); (3) Step-up prepayment — increase extra payment by 10% each year with salary increments. The amortisation schedule shows precisely how each strategy changes your loan closure date and total interest paid.

Question 16

Why is my loan balance still high after 5 years of EMI?

Accepted Answer

This is normal for long-tenure loans. For a 20-year home loan, after 5 years (60 EMIs), you've paid only about 12% of the principal. This is because most early EMIs go toward interest. The amortisation schedule reveals this clearly — in Year 1 of a ₹30L/8.5%/20yr loan, only ₹62,544 of ₹3,12,420 paid (just 20%) goes to principal. It takes until Year 14 before the monthly principal payment exceeds the monthly interest payment.

Question 17

What is a bullet loan and how does amortisation differ?

Accepted Answer

Bullet loan (or interest-only loan): borrower pays only interest for the tenure; entire principal is paid as a lump sum at maturity. Common in: working capital facilities, some real estate bridge loans, overdraft facilities. Amortisation schedule for bullet loan: each month shows only interest payment; principal column = 0; balance stays unchanged until final payment. Different from regular EMI (reducing balance) loans where both principal and interest are paid monthly. Most Indian home, personal, and car loans are regular reducing balance — not bullet.

Question 18

How does the amortisation schedule affect home loan tax deductions?

Accepted Answer

Two separate deductions for home loans: Section 80C: principal repaid during financial year — deductible up to ₹1.5L (within overall 80C limit). The 'Principal' column in the amortisation schedule summed for April–March gives this figure. Section 24(b): interest paid during financial year — deductible up to ₹2L for self-occupied; unlimited for let-out. The 'Interest' column summed April–March gives this. Your bank's annual certificate confirms both figures. Claim both deductions in ITR for maximum tax benefit.

Question 19

What is EMI moratorium and how does it affect amortisation?

Accepted Answer

EMI moratorium = temporary pause in EMI payments granted by bank (as in COVID-19 RBI moratorium in 2020). During moratorium: no EMI paid; interest continues to accrue on outstanding balance; moratorium interest is added to outstanding principal (capitalised). After moratorium: amortisation schedule is recomputed on higher outstanding balance. This increases total interest significantly. Example: 3-month moratorium on ₹30L/8.5% loan adds ~₹64,000 to outstanding principal and increases total interest by ~₹1.4L. Always request updated amortisation schedule post-moratorium.

Question 20

How to use this loan amortisation calculator?

Accepted Answer

Step 1: Enter loan amount using slider. Step 2: Set interest rate (use loan type presets for typical rates). Step 3: Set tenure in years. Step 4: Choose EMI start month to see actual calendar dates. Step 5: Enter extra monthly payment to see prepayment impact. Step 6: Review month-by-month table — toggle to Year Summary for a compact annual view. Step 7: Click Print/PDF to save or print the schedule. Match with your bank's statement to verify accuracy.

Loan Amortisation Schedule India 2025-26 Month-by-Month EMI Breakdown — Principal, Interest & Balance for Home, Personal, Car & Business Loans

Month-by-Month Amortisation Schedule

How Loan Amortisation Works in India — EMI Breakdown, Prepayment & Reducing Balance Method

Reducing Balance EMI Formula

Key Insights from Amortisation Schedule

3 Real Indian Loan Amortisation Examples

1. Ramesh — ₹50L SBI Home Loan, 20 Years @ 8.75% 🏠

2. Priya — ₹5L HDFC Personal Loan, 3 Years @ 13% 💳

3. Suresh — ₹15L Car Loan, 7 Years @ 10% with ₹5K Extra/Month 🚗

5 Expert Tips for Using Your Loan Amortisation Schedule

Prepay in the First 5 Years — Every ₹1 Saves ₹2–4 in Interest

Request Your Bank’s Official Amortisation Statement Every April

Reduce Tenure, Not EMI, After Rate Cuts — Saves More Interest

Use the Schedule to Plan Your Section 24(b) Deduction Optimally

Compare Flat Rate vs Reducing Balance — Never Take a Flat Rate Loan

Frequently Asked Questions — Loan Amortisation Schedule India

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Disclaimer — Loan Amortisation Schedule (CalcWise Finance)