How to calculate home loan EMI?

POSTED BY Jagoinvestor ON January 18, 2008 COMMENTS (129)

Taking a loan on EMI is a good option, but do you know how to calculate EMI? It’s not just about a Home loan, it can be any loan EMI.

In this post I will tell you how does the monthly EMI for Home Loan is calculated and how increasing Tenure does not help much after a certain point.

How to calculate EMI on loan

What is EMI?

EMI is an abbreviation of Equated Monthly Installments. The name itself explains what does it exactly means. It’s a monthly installment that a borrower has to pay to the bank or the financial institute from where he has taken the loan.

This EMI depends upon the principle amount of loan and tenure i.e. years for which the loan has been taken.

How to calculate EMI?

EMI can be calculated on the basis of 3 terms, which are as –

  • Loan Amount
  • Interest Rate
  • Loan Period

The formula for calculating EMI is given below.

home loan EMI formula


L = Loan amount
i = Interest Rate (rate per annum divided by 12)
^ = to the power of
N = loan period in months

A lot of people do not know that increasing the tenure only leads to increase in Interest amount payable and nothing else . The decrease in EMI is not proportional to the increase in Loan tenure.

In Housing Finance, Equated Monthly Installments (EMI) refers to the monthly payment towards interest and principal made by a borrower to a lender. Have a look at the example given below to get a clear idea about it.


Assuming a loan of Rs 1 Lakh at 11 percent per annum, repayable in 15 years, the EMI calculation using the formula will be :

   EMI   =     (100000 x .00916) x ((1+.00916)^180 ) / ([(1+.00916)^180] – 1)
   EMI   =     916 X (5.161846 / 4.161846)
   EMI   =     Rs 1,136

Note  at  i = 11 percent / 12 = .11/12 = .00916

You must have got an idea about calculating EMI. Some people think that increasing the tenure of EMI is a good option because it will help to reduce the EMI.

EMI Calculator:

Q. How much benefit we get by increasing the Tenure of the Loan. Considering a Loan of Rs 30 Lacs at 12% interest rate.

Ans: I did a bit of my so-called “mathematical skills” … and found out that EMI is of form

EMI(n) = C1 X C2^n / C2^n-1 , where
C1 = L * i
C2 = 1+i

So the difference in the EMI value for n+1 and n is nothing but

by a bit of calculation I got :

EMI(n) – EMI(n+1) = C1 x (C2^2n – C2^n) / (C2^2n – 1)

and when n becomes very large … and applying limit, we get

Lim C1 x (C2^2n – C2^n) / (C2^2n – 1)
-> Inf


Lim C1 / C2^n

and as C2 > 1 (C2 = 1+i)


Lim C1/C2^n = 0

Or in other words, if we differentiate the EMI formula … we get a constant …

It shows and proves that the difference in EMI value is not very significant compared to the change in tenure and at one stage its almost of no gain to increase the tenure.

To show this argument: I would like to present an example, considering my old question:

Q. How much benefit we get by increasing the Tenure of the Loan. Considering a Loan of Rs 30 Lacs at 10% interest rate.

See the table given below. In this table, i have shown how EMI changes with increasing tenure, and also the difference in your old EMI and new EMI you will have to pay after increasing the tenure.

 Period  New EMI  Difference between old & new EMI
 10  39645
 15  32238  7407
 20  28950  3288
 25  27261  1689
 30  26327  934
 35  25790  537
 40  25474  316
 45  25286  188
 50  25173  113
 55  25104  69
 60  25063  41
 65  25038  25
 70  25023  15
 75  25014  9
 80  25008  6
 85  25005  3
 90  25003  2
 95  25001  2
 100  25001  0

From this table you must have realized that after a particular time there is no sense in increasing the tenure because the difference between your old EMI and new EMI will be in some rupees which is negligible.

So it is advisable not to extend your loan tenure to much just to reduce the EMI.

EMI calculators of different banks

Interest rate on loan is different for different banks. So the EMI you will have to pay is also different from bank to bank. In the table given below, I have enlisted some top banks and their EMI calculators link. Click on the links to check the EMI of different banks.

Tips before taking loan on EMI

  • Check the EMI’s of all banks before tanking loan
  • Don’t extend your loan tenure just to reduce the EMI
  • Negotiate with your agent or loan providing institute when you are planning to take a big amount of loan
  • Pay your EMI on time
  • Make sure you have a good credit history and you are eligible for home loan before applying.
  • Do not expect from a sales person in a bank or the institute from where you are lending money to tech you how to use it. If you are taking a house loan then research for all the related expenses on your own and spend it accordingly.
  • And finally, collect all the documents after repaying your loan.

Taking loan is not a bad thing and it doesn’t carry a risk with it, but its only then when you manage it properly. If you have any doubts regarding this information please leave your query in the comment section.

129 replies on this article “How to calculate home loan EMI?”

  1. NIKHIL says:

    Suggestion on Part payment and Interest Payable

    CASE 1
    I take a home loan of 300000 lakhs @9.4% for 10 years. Total interest payable by end of 10 years to bank is approx 16 lakhs (calculated online)

    CASE 2
    I take a home loan of 300000 lakhs @9.4% for 20 years. If I do part payments annually (say 2/3 lakhs every year) along with regular EMI’s ; and repay the loan amount in 10 years ; will my total interest payable to bank be the same as CASE 1 (i.e. 16 lakhs)
    Since time taken to repay is 10 years in both cases.

  2. Rahul says:

    I want to Rental Loan form the Bank. And my lease agreement is for 9 years and my monthly rent is Rs.1,50,000/- which Increase every year 5% .
    Request you please guide me how to get add my yearly 5% increase amount with my Original Rent 1,50,000 + 7500 =1,57,500 How to take and add my above amount every year.

    1. Hi Rahul

      I am not clear on what is your question. Please repeat it with more clarity


  3. Rajan says:

    Dear Manish,

    I got a home loan from a co-operative bank. the details are as follows:-
    Loan Amount: 15 Lakhs
    Tenure: 180 months
    Interest Rate : 12 % (Floating rate of interest)

    The things is we have been paying the EMI of 18,003 regularly, but some months back the Bank changed the Rate of Interest but did not inform us of the change & we kept on repaying at 12%. The new borrowers are charged an rate of interest of 10.25% currently.
    Which we feel is cheated, as the document clearly states that we have got a loan on floating rate of interest, and we should have also been passed on the benefit of rate cute & availed rate of interest of 10.25%.
    After we questioned the bank, they were caught a spot of bother.
    The bank is giving us an option of closing the current loan account & giving us a fresh loan on the remaining principal amount at 10.25%.
    We feel we would end up paying more in such case. They are considering the last unpaid principal amount & this will attract high interest amount as the loan will be a fresh one.
    Request your guidance, as how much should be the loan amount (Principal to be paid) if we were to be charged as per floating rate policy (according to RBI rules).
    To simplify, giving the actual scenario.
    Loan amount = 15 Lakhs.
    Rate of Interest = 12%
    EMI = 18003 for 180 months.
    EMI paid for last 53 months = 18003*53 = 954159

    According to bank Principal left to be paid = 12,91,485
    Now, they will start a new loan account with this as loan amount & the EMI for this wil be Rs. 16702.
    So, we would like to know under normal Floating interest rate account what should be the EMI for the 54th month installment if the tenure remains the same. (i,e. 53 months paid at 12% ROI & next 127 months paid at 10.25%)
    Please help.

    1. Hi Rajan

      This is very specific query which you should follow up with the concerned authority only. We wont be able to comment on that


  4. Tamal says:

    i have taken home loan of amt-13,50,000/- from SBI for 15yrs @9.55% …now this month i been paid 6,91,320/- as part disbursment, but bank say my emi is 14,300/- to be start from next month. Here is the doubt unless they paid full amt how they are calculating the emi on total loan value and how the emi comes with a value of 14,300/- i cant understand, please help me if there are some undercover rules for home loan not known to me……..

    1. Note that the EMI is same, but now the tenure will come down .. If you keep the low EMI, then the tenure will be still be same !

  5. Ashish says:

    Hi Rahul,

    I have a home loan of 2500000 for 16 years at 9.75% interest rate. I want to take full benefit of tax exemption of 2 lacs on interest. So just want to know how much should I pay in the year to get the full benefit.


    1. That calls for a seperate article ! . I suggest as of now talk to your bank loan lender. They will guide you on this

  6. Arun says:


    Say, i am going to take a home loan in SBI for 30Lakhs, interest rate 10.0%. Now if i quote
    1. for 360 months, the emi will be 26328
    2. for 240 months, the emi will be 28951

    how much will i save, if i opt for 360 months and pay 60,000 as part payment every year?


    1. In that case it would be much less than 240 months !

      1. arun says:

        ya thank you !!!!

  7. Rahul says:

    Hi Manish,

    I have taken a loan from LICHFL amounting 15 lacs out of which they have disbursed around 6 lacs.
    This month they sent message of EMI due on 10th July for Rs. 13537. Ideally this amount of EMI is applicable only after 100 % disbursement.
    They say you have to options i.e. pay as per disbursement or start the full EMI right from the beginning.

    I don’t understand what to do. Please throw some light over this and guide.


    1. Hi Rahul

      This is very specific query which you should follow up with the concerned authority only. We wont be able to comment on that


    2. Raj says:

      Bank provides 2 options : as per disbursement : It means you need to pay interest only for disbursed amount until full amount get disbursed .After full amount disbursed ,Full EMI will start .
      2.start the full EMI right from the beginning:
      From 1st disbursement onward start paying full EMI .Initially Principle component will be more and interest component will be less in EMI .

      If you have money to pay ,it is good to go with 2nd option because less outstanding amount will cause less interest to pay.

  8. s t desai says:

    loan amount rs.1000000 rate of interest 9.90% tenure of repayment 240 months what amount of monthly emi.

  9. Neil says:

    pls let me know the calculation for loan amounting to 150000 at 2.99 as intrest with 36months and 189000 at 2.99 as intrest for 48 months.

    1. badrinath says:

      loan amount rs.1200000 rate of interest 10.5% tenure of repayment 114 months, after the fourth emi i will do a partial prepayment of Rs.500000 keeping the tenure same what will be the revised emi

      1. Hi badrinath

        It’s not so straight forward. Ask bank on this and they shall be able to help you on this

    2. Hi Neil

      Your cases is a bit complex and I think we are not the right people to comment on it.

      My suggestion would be hire someone who is professional in this area and consult them


  10. Anju says:

    Dear Manish,
    I had taken home loan of Rs 21 L from LICHFL for 20 yrs in July 2009. For only about four months the rate was 8.75% and then they increased to 12%, its continued so till now. I paid EMI of 22007. Now I have savings and want to return the loan ASAP. Is it a good strategy if I pay RS 10 Lakhs now and then the rest (My o/s loan is 19,40,000) after another three months from our savings (my, husband and daughter). Some people say it was useful had you paid in small amounts from the beginning. Now its not very useful to pay, and that we should invest the amount elsewhere. Would like to know your opinion.

    1. You can surely pay a big chunk . Its just a start and will help you .. make it

      1. Raj says:

        You need to give application to wave off penalty for pre-payment in case of LICHFL else they may charge for this prepayment .
        There is another condition which LICHFL has ,you can’t do pre-payment for first 6 months .Pls cross verify with LICHFL before paying .Clear all penalty clauses related doubts .

  11. varun taneja says:

    Dear Manish,

    You need to be thanked for the work you are doing , I regularly read your comments and the way you answer all the queries is commendable . now coming to my query , i had taken a home loan for Rs 30 lacs ( under construction flat , payment goes based on amt disbursed) at 10.25% interest rate for 20 years from x bank , now i am transferring this loan to Y bank at 10.1% interest rate and was also thinking of reducing the tenure from 20 years to 10 /12 years , what do u suggest . thanks

    1. Varun

      First thing you can do is approach the existing bank and ask for the interest rate change if they allow . For change of tenure, the only option is to increase the EMI amount, you can do that if you can afford that !

  12. Shyam Ramani says:


    I have taken loan of 19,30,000 at 10.5 % variable rate of interest for the period of 20 years. The first part disbursement of the loan was for amount 13,00,000 (13 Lacs) done in Dec 2012. After two month of disbursement (i.e. in Feb) the rate of interest was reduced to 10.25%, and again in Sep 2013 it was increased to 11.00%. I had signed an agreement for reduced rate of interest at 10.25% from Dec 2013. The remaining amount of the loan (i.e. 6,30,000) will be disburse in Feb 2014. Kindly let me know, how to calculate the tenure after full disbursement and also if the rate of interest changes later on.

    1. Shyam

      Why do you want to calculate it, you can get the revised tenure info from your bank itself !

  13. Chetan Ambi says:

    Thanks for the detailed explaination on home loan. I don’t have home loan but in future this information is going to help me a lot. Thanks a lot!!

    1. Good to hear that, you are slowing building your personal finance muscles 🙂

  14. Deena says:

    Hi Manish,

    I have taken a home loan from ICICI bank “EMI Under Construction”, So far I have got two disbursements and two more disbursements are pending. When I got the sanction letter of home loan the interest rate was “10.5”, I had to pay EMI say “x” for 20 years. So far I have paid EMI for 9 months. Now, the interest rate has been increased to “10.75” and I was informed that still I have to pay EMI for 20 years and 4 months. I understood that “EMI under construction” doesn’t increase the EMI amount instead the tenure. But I am shocked that 0.25 increase in interest rate costs me so much i.e. increase in tenure means obviously I have to pay 12 months EMI extra?

    Could you please throw some lights on this?

    I am really confused about this loan and its traps


    1. Deena

      They are NOT Wrong . A small increase in interest rate can push your tenure by a big margin. You can calculate this yourself, In the EMI calculator, change interest rate number and see what tenure satisfied the same EMI amount.

      But this should happen in start only , not at the end leg of the loan . Welcome to the world of Home loans !

      1. Raj says:

        If you have some money to pay as re-payment ,pls pay ,it will reduce your tenure a lot .Suppose if you do prepayment of Rs.100000 ,it will reduce your tenure a lot .As said by Manish ,in starting year it makes lots of diff .Inquiry with your bank and if you have low interest generating saving use them for pre payment.

  15. Rohit Prajapati says:

    Hi Manish,

    I have two queries,

    1) In my Provisional certificate the intrest expected amount written as 59000/- per anum, However in final Intrest certificate the actual amount written as 83000/- per anum, How the calculation is been done? and To whom i concern about this(The Branch or Home loan department)

    2) My Rate of Intrest gets down from 10.75 to 10.50 and 10.50 to 10.25 but no change in EMI. how do bank is working on this calculations….. would they decrese my loan tenure or intermediate amount adjustable?

    Loan from Bank of India.

    Please guide me on same.

    Rohit Prajapati

    1. Hi Rohit

      As its a PSU bank , I strongly suggest file a RTI and get answers from that, that will be the fastest way .

  16. Pranav Wagde says:

    Hi Manish, your blog is very useful.

    I have my home loan in SBI with 10.25% for 20 years for loan amount of Rs. 17,60000/-
    I did the calculation as per the formula given in your blog.
    It says my loan amount should be 17296/-, but i am paying 17580/-

    Am I missing anything in the calculations?

    1. May be the processing fees and other charges . Take the explaination from bank !

    2. Pawan says:

      I had availed 1500000 housing loan from SBI in may 2015. I ve got last intalment of my loan on march 2016. Now i ve to repay my EMI from may 2016. My bank says it will be around 18000 pm for 14 years but my EMI calculator says it is around 16000pm plz solve my problem and calculate my EMI pm for sbi housing loan of 1500000 for 14 year

      1. Hi Pawan

        This is very specific query which you should follow up with the concerned authority only. We wont be able to comment on that


  17. amit says:

    Say i have taken a home loan with following details:
    loan amount: 3000000 (thirty lakh)
    tenure:25yrs(300 months)

    Now my question is if i don’t pay any emi and I say that I will pay full amount after 300 months. What would be the amount I have to pay after 300 months

    1. It will run into several crores . This is not how loan works 🙂 .

  18. manjunath says:

    hello sir,
    im plannin to construct a home, hence forth im applyin loan for 15lakh, where in interest rate is 10%.. hw 2 calculate emi?? usin ur formula, im endin up in an unknown number.. can u plz explain me.. thank u in advance

    1. What is the number you are getting ?

      1. V.S.Ramanaryanan says:

        sir for the loan amt of 1500000/- fifteen lakhs for 20 years, sir give in detail what the EMI Would be
        +principle amt monthly

  19. santosh kumar khanna says:

    Dear shri Chouhan,

    I shall be highly obilized if you please send me per year interest and principal for a housing loan of rs 2000000 for a240 months tenure @ 9.95% intt
    Thanking you


    1. You can do it using the sheet which are given at the end of the article

  20. Budhi Singh Negi says:

    hello sir I ‘ve taken a loan of Rs. 23,00,000 @10.75 for 20 years period. please calculate EMI rate as per above loan amt, interest and period.

  21. sudhakar says:

    Dear Manish,
    Found your blog interesting.Please tell me how to calculate the total amount to be repaid ? how to calculate the break up of Principle and interest for the first month?
    How to calculate the break up from the month 2 ?

    Please guide me. I have applied for a loan of 13lakhs for 10 % interst with HDFC for a tenure of 20 years.

  22. sudhakar says:

    very useful article. it spoke our minds.Thank you so much.

  23. Deepesh Khatri says:

    Thank you Manish for writing such informative articles.

    I have following query about Home Loan.
    I have selected a builder who is running a scheme called “Live Lite” where at booking we have to pay 20% & Bank will pay rest 80% to the builder(upfront – I think). Till flat possession Pre-EMI is paid by Builder.

    Its looks beneficial to me, what is your view?

    1. Deepesh

      The question is more suitable for long discussion and more inputs , please open a thread here –

  24. Sundar says:

    I have a question Manish,
    We have taken a loan of Rs3590000 and pay an EMI of Rs 40900 from Jan12.
    During September and October we paid Rs one lakh each as partial repayment. We would like to know how many instalments we need to pay further at the same rate of EMI
    Kindly answer me by mail.

  25. harsh says:

    hello sir i ‘ve taken a loan of 1500000 @10.75 i just want to know which tenure period would be beneficial for me if emi can be paid up to 25000.

    1. If you can pay upto 25,000 as EMI , the tenure will automatically get reduced , just start paying more !

  26. Murugan says:

    Hello Manish,

    Thank you for your valuable information. I have already obtained a Home Loan in my Native place (for which EMI is yet to start) and would like to avail a new loan where I am currently put up.

    Could you kindly let me know or point to any information that would be helpful for me (in terms of using the money wisely – reduce loss of cash as interest etc.) and others who are in a similar situation?

    Thanks in advance for your guidance.

  27. Reshu says:

    Thanks for putting the calculations Manish. I am planning to transfer my home loan from one bank to another. I want to calculate how much money i am going to save before i make this decision. Can you please point me to calculations which i can do, considering i will keep prepaying some amount in loan time to time?

    1. Right now we do not have any such kind of calculator . I will try to prepare it sometime , as of now you can pose your question here

  28. SANTOSH says:

    Ihave taken the loan of Rs. 8500000 for 15 years@ 9.5% in 2004. Now after 8 years, how much should I pay totally if I want clear the loan now. And is it wise to do so?

    1. You can check your loan outstanding from the bank where you have taken the loan from . Is it wise or not, will depend on your view about the debt and your over financial situation !

  29. Dinesh says:


    My loan amount is 1500000 lakh, for 20 years & rate if int is 11.10
    EMI – 16310

    Please tell me what is the calculation. Interest & Principle amount in EMI.

      1. suresh says:

        thanks nice explanation for EMI.
        after finding EMI from formulas mentioned above. how can we know what is the amount of principal & interest involved in EMI?

          1. suresh says:

            thanks for the reply.

            i am looking for the formula used for principal & interest calculation, like above used for calculating EMI.
            this will help me to make my own calculation sheet.

  30. Rajesh says:

    Dear Manish Ji,
    Pls tell me how to calculate this figure
    ((1+.00916)^180 ) / ([(1+.00916)^180] – 1)

    (5.161846 / 4.161846)

    EMI = Rs 1,136

    1. You can do it in excel sheet .. just put a “=” before that and press enter .

  31. naresh Agarwal says:

    Please advice
    1. shall i withdraw my pf fund to reduce my home loan as home loan intrest @ 9.8 % and PF intrest rate is 8.6 % only
    2. How the home loan intrest is calculated compounded quarterly or monthly as pf intrest rate is compounded monthly basis…..

  32. Binu Mathew says:

    I have taken 12 lakh loan. The interest rate is 8.25 for the first six months and then 9.25 for the next twelve months. How will I calculate the EMI for this loan? I’d be grateful to hear your solutions please. Thanks Binu

    1. You need to make an amortization sheet (learn about it) and then you should be able to make it on your own !

  33. SACHIN says:

    Thanks for writing the mindblowing blog
    My quiry is
    I have purchased a under construction flat, it will be ready in next 1 yr., my construction company asking for the documents for making loan case. the EMI for which will be started after i get the possession of the flat.
    1. do i have to pay the intertest on the money the construction company using for the period untile EMI start date. if yes can i pay some principle also with this interest.
    2. if i have some money with me now, is it better to pay to the construction company & reduce the loan amount or to prepay this lumpsump amount to the bank after the loan case strat.

    1. Sachin

      This question is best suited for our forum :

  34. Rajiv says:

    Great work man ..Keep it up..:-D

  35. Vasundhara says:

    My home loan (sbi) Rs 20,00,000. tenure 15 yrs emi Rs 19226 I pre paid Rs 3,00,000 towards principle .now i like to pay another 4,00,000 towards principle also want to reduce tenure to 10 yrs . Please give me suitable suggestion

    1. Vasundhara

      You can keep prepaying the amount , when your prepay , your EMI will be same, but the tenure will automatically come down ! . Dont worry on that. I am sure when you prepay 7 lac in total out of 20 lacs, your tenure will be below 10 lacs only . Ask your bank to give you the updated tenure now

  36. selvi sathyanarayanan says:

    Mr. Manish
    I wanted to know whether the duration of the loan repayment will reduce or not if i increase the EMI.IF yes, kindly give me the benefits of doing so from the borrower’s point of view.

    1. Selvi

      Better than increasing the EMI , go for monthly prepayments .. that would be a better choice !

      1. Prasad says:

        I am not able to understand the diffrence between EMI and MONTHLY PAYMENTS.Can u please clarify.Monthly payment how does it help

        1. Monthly prepayments are extra payments you can do other than EMI !

          1. Prasad says:

            Thanks for your immediate reply.To be specific to my question ,I have availed loan from Union bank of India personal loan 25 laks @ 14.25 for 8 yrs.I am paying 43785.00 emi.How do I reduce the emi.One thing is clear from your reply that I can make some extra payment to reduce the interest .

            1. Prasad says:

              Sir ,Do u have your office in chennai.

            2. You cant reduce the interest, you can only reduce the loan outstanding , for which you can make extra payment other than your regular EMI !

            3. Prasad says:

              Thank u Sir.

  37. Aditya says:

    Hi Manish – great to see the black magic maths behind the EMI, i do have a question on this though, the above formulae seem to calculate for ‘repayment type loans’ which is fine most of the time. Quite curious what would be the formalae when only the ‘interest component is being paid’ as is common in western countries, clearly the above does not suit those cases?


    1. Aditya

      Some maths might be needs in that case .. not aware of that right now .. may be asking it on our Q&A forum would help

  38. tejkant says:

    That was really an eye opener


    1. Tejkant

      Good to hear that you liked it 🙂

  39. nirmal says:

    EMI = (100000 x .00916) x ((1+.00916)^180 ) / ([(1+.00916)^180] – 1)

    ====> 916 X (5.161846 / 4.161846)

    EMI = Rs 1,136

    reply me step method : how to calculate ( 1+.00916) ^180
    what is mean ^

    1. Nirmal

      That means to the power of , you can use our calculator on EMI :

    2. Apoorva says:


      ^which means Number months in a year means 12*15=180.


  40. nirmal says:

    loan amount 1000000, 60 months , interest 12.25 % how to calculat education loan emi method ? i want step method to find out principle and interest

  41. Manish says:

    Hi Manish,

    I have taken a home loan of 17 lakh for 20 years of which only 9.5 lakh is disbursed as yet.Pre EMI interest is being deducted of approx Rs8k .
    Can you pls recommend the best options out of below:
    1. Get Pre-emi converted to full EMI (of 17k) so that prinicpal also gets reduced
    2. Continue paying interest only till full loan disbursement & pay partial repayments from after some intervals to reduced liability

    Thanks in advance…!

  42. NVLN says:

    In my Query, please read the Interest Rate as 8.25 % PA (type error – mentioned this as 8.25% PM).

  43. NVLN says:

    What is the procedure to find out the break-up of Principal and Interest within a Constant EMI. For Example,

    Loan Amount = INR 100,000/-
    EMI = Constant Amount of INR 3,145.00Per Month, for 36 Months.
    Rate of Interest = 8.25%PM
    Thus, from Month 1 to Month 36, the Principal Component would increase while the Interest Component would decrease.

    Please let me know how the appropriation of the EMI happens, between Principal and Interest Amounts, across these 36 Months.

    Thanks in advance.

  44. Amish says:

    I have a plan to take home loan up to 15 lacs.Right now my property is in underconstruction. Now, i want to know if i get the loan from bank during that peroid. How should i have to pay EMI if bank give a money to contractor on progress based.

    1. Amish

      the whole procedure whold be almost same as you take a new flat , where exactly are you finding the problem ?


  45. Mukesh Shaw says:


    I want know how bank calculate home loan limit of a person based on his earning power.

    Thanks & regards,

    1. Mukesh

      I am not sure on that, but it should be easy , it should be X times the yearly income , where X can range from bank to bank and is calculated based on job sector , security , past repaying capacity


  46. Rajashekar says:

    I”ve applied a home loan by structured EMI, Where I am paying 1st 4 EMI of Rs. 1000/- and 6th EMI as 11320.00 & nest 5 EMI as 1000.00 and 6th EMI as 11320 for this process entire 60 month paying.

    Kindly provide the EMI repayment schedule with EMI, Interest Portion, Principal Protion and Outstanding Principal after EMI.

    Loan Amount 100000.00
    Tenure – 60 Months
    Sturctured EMI – Monthly 1000.00 & Half Yearly 11320.00
    Rate of Interest: 20.00%

    Pls replay as per the details, if you can provid ethe schdule in Excel than better for me.

  47. Prithvi says:

    Hi Manish,

    I have taken 30,71,000 home loan from SBI for a tenure of 20 years. Interest rate is 8 % 1st year, 9% for 2nd and 3rd year and then floating. SBI has included 18 months of Moratorium period since property will be ready by then, and they will charge only interest part and not principal during this period. Now builder is demanding me to avail ADF facility with SBI. I feel that ADF is not good for me because even on face I am paying extra with Moratorium option, if I invest balance part of EMI for a period of 20 years with average 10 % yearly return that would fill the extra amount I am paying. And second advantage is that I can keep check on builder for work completion to my satisfaction. Can you please help me decide on which option to choose ADF or Moratorium period?

    1. Prithvi

      Dont go for ADF , choose pre-EMI , here is why :


      1. Prithvi says:

        Thanks Manish..

  48. Satish12 says:

    Fantastic job done by you Manish. Thanks to people like you who are working for the benefit of all without looking for any personal benefits. Kudos.

    1. Satish

      Thanks 🙂 . Keep reading

  49. Thangavel says:

    Dear Manish,

    First of all my sincere thanks to you for writing this blog. It really educates me a lot and helps me to lead a wealthy life.

    I’ve a query to you regarding housing loan per-repayment of principal while the loan is in partial disburse sate (the loan amount is not fully disbursed).

    In details:

    – I booked a FLAT which is under construction
    – For that, I opt for home loan from SBI (EASY HOME LOAN product)
    – The load got sanctioned for 35L on Dec 2009 but the payout(disburse) of the loan amount is linked with the progress of the my flat.
    – So for, I the bank disbursed 20L as my flat progressed
    – The repayment(EMI) will start in one of the following cases which ever comes first.
    1. on July 2011
    2. after completion of my flat (i.e. once the full loan amount is disbursed)

    – And I don’t need start any repayment(pre-EMI) before the EMI commences.
    – But the interest will be calculated for the partial disburse amount and it’s accumulated(again, interest is applicable for the interest) in my loan account.
    – From my loan account statement, I can see around 1.5L is accumulated a interest for the partial disburse.
    – Meanwhile, I’ve saved around 5L from my salary and put it in a FD (in a different bank) where the interest rate is lower than the home loan interest.

    My question here is:
    Can I pay 5L towards my loan account now? (1.5L towards interest + 3.5L towards principle)
    I asked the same question to my SBI bank manager, he confirmed about the interest part (1.5L) but he is not sure(he don’t know the T&C) about the principle part. He recommend me to not payback the principle now but after the EMI starts.
    My problem is, loosing money because of,
    – the interest difference between my FD and my home loan
    – and the TDS for interest earned form my FD.

    And I fear, if any penalty applicable for if I prepay principle(3.5L) at this stage.


    1. Thangavel

      Please ask your questions at and please make it short


  50. sagar says:

    good this is helpfull.

  51. Srikar says:

    your work is commendable..
    but you forgot to take into account time value of money.

    Value of money after 30 years is going to be much less than what it is going to be after 10 years. So, repaying the loan in 30 years is much beneficial than repaying back in 10 years. ( in accordance to your stats mentioned above)

    You are right when it comes to comparison for 100 years..but I dont think it applies in real world as no bank would offer you that…


    1. yup

      Agree with you


  52. Geo thomas says:

    hi manish i read this mail, i adviced my sister to take a longer duration home loan, the reason is every year she does top up of 1lac rs in principal and the difference from 20 years to 15yrs is small, she invest the small part in sip, which we book book profit and prepay the loan, we have planned to stop the loan in ten years . this way she is paying more of principal in the initial 6 years.
    is it a good statergy.

    1. Geo

      I dont think so . If it was increasing the tenure from 5 to 10 yrs or 10 to 15 yrs, the reduction in EMI would be good enough , but just try to see what is the EMI reduction happenening when you increase the tenure from 20 to 25 yrs ?

      For a 40 lacs loan @10% interest and tenure 20 yrs , EMI per month = 38601

      However when you increase the Tenure to 25 yrs , the EMI comes to 36348 . Thats very insignificant decrease .


  53. Amarnath says:

    Manish ,

    U Rockz . Tihs blog makes me to re check my math skills 😉 . U r simply awsome

    1. manish says:


      Thanks man … I am sure you are talking about the calculas part 🙂


      1. Anand says:

        Was just browsing through old posts of yours. Would be good if readers also browse this loan amortization schedule @

  54. Ajeet Khurana says:

    Brilliant conclusion man. Thanks for this 🙂 I saw this blog today for the first time, but I will visit again 🙂

    1. Hi Ajeet

      Thanks for stopping by and reading . I am sure you will get amazing things in future too 🙂


  55. Anonymous says:

    I have taken a fixed home loan of 20,00,000 for 15 years with 9.5% rate. My EMI was 22K, however i started paying 30K instead to save some interest.
    Current outstanding is 17.40 Lacs,
    With my calculation i will be closing the loan in next 6 years.
    I have some money now around 1 Lac, Should i pay this one and save interest or invest in a mutual fund and continue as per plan to close in 6 years.

  56. Manish Chauhan says:

    @Stock trading

    Thanks a lot .. what do you think about the maths done here 🙂 .. just curious 🙂


  57. stock market says:

    You are brilliant! Thank you for sharing your wonderful ideas and tools.

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