Amortization Calculator
Generate a complete amortization schedule showing every payment, principal paid, interest paid, and remaining balance.
Enter loan details to generate amortization schedule
Amortization Calculator — See Exactly Where Every Rupee Goes
An amortization calculator breaks down every single EMI payment into its principal and interest components across the entire loan tenure. This monthly schedule reveals how loans are structured — early payments are predominantly interest while later payments shift heavily toward principal repayment. Understanding your amortization schedule is essential for making informed prepayment decisions and planning your financial goals around your loan lifecycle.
For a ₹20,00,000 home loan at 9% for 10 years (120 months), the monthly EMI is ₹25,335. In Month 1, ₹15,000 goes to interest and just ₹10,335 reduces the principal. By Month 60, the split shifts to roughly ₹9,200 interest and ₹16,135 principal. By Month 100, only ₹3,200 is interest and ₹22,135 is principal. Over all 120 months, you pay ₹10,40,200 in total interest on a ₹20,00,000 principal — the schedule shows you exactly when and how this cost accumulates.
What is Amortization?
Loan amortization is the process of paying off a debt through regular scheduled payments over time, where each payment covers the interest on the outstanding balance plus a portion of the principal. As the loan balance decreases, progressively more of each payment goes toward reducing the principal.
- In an amortizing loan, early payments are predominantly interest because the outstanding balance — and therefore the interest charge — is at its highest at the start of the loan.
- The "crossover point" is the month when more than half of your EMI goes toward principal repayment rather than interest — prepaying before this point saves the most money.
- An amortization schedule is a complete table of all payments showing the date, payment amount, principal portion, interest portion, and remaining balance for each period.
- Home loan amortization schedules are useful for tax planning — they show exactly how much interest (Section 24b deduction) and principal (Section 80C deduction) you paid each financial year.
How to Use This Calculator
- Enter the Loan Amount (principal borrowed, e.g., ₹20,00,000).
- Enter the Annual Interest Rate (e.g., 9%).
- Set the Loan Term in months or years (e.g., 120 months / 10 years).
- Select a Start Date to generate a dated month-by-month schedule.
- Click Calculate to see the full amortization table with running balance.
- Download or print the schedule to plan prepayments or share with your bank.
Amortization Formula — Month by Month
- Principal Repaid = EMI − Monthly Interest
- New Balance = Previous Balance − Principal Repaid
- Example (₹20,00,000 at 9% p.a. for 10 years | EMI = ₹25,335): Month 1 Interest = ₹15,000 | Principal = ₹10,335 | Balance = ₹19,89,665
- Total Interest over 120 months = ₹10,40,200
Key Terms
- Amortization
- The process of paying off a loan through regular scheduled payments over time. Each payment covers interest on the outstanding balance plus a portion of the principal.
- Front-Loaded Interest
- A key characteristic of standard amortized loans — early payments consist mostly of interest because the outstanding balance is highest at the beginning. This is why prepayments early in the loan tenure save the most.
- Outstanding Balance (Running Balance)
- The remaining principal owed after each payment. Prepayments directly reduce this balance, cascading into lower interest charges for every subsequent month.
- Annual Amortization Summary
- A year-by-year summary showing total principal paid, total interest paid, and closing balance — useful for income tax filings under Section 80C and Section 24(b).
Tips
- Study the amortization schedule to identify the crossover point — the month when more of your EMI goes to principal than interest. Prepayments before this point save the most.
- Use the annual summary to accurately claim Section 80C and Section 24(b) deductions in your income tax return.
- If your lender offers the option, choose a schedule with shorter tenure over lower EMI — even a 2-year reduction in a 20-year loan saves lakhs in interest.
- Review your amortization schedule after any rate change (floating rate loans) or partial prepayment to see the updated interest savings.
- Compare your actual bank statement against the amortization schedule periodically to ensure your bank is correctly applying payments to principal.
Frequently Asked Questions
Interest is calculated on the outstanding loan balance each month. At the beginning of the loan, the balance is at its highest, so the interest portion of your EMI is highest. As you make payments and the balance decreases, the monthly interest charge decreases, allowing more of each subsequent EMI to go toward principal repayment. This structure is called a reducing-balance or amortizing loan, which is standard for all home loans, car loans, and personal loans in India.
A prepayment directly reduces the outstanding balance, which then recalculates all future interest charges from that lower base. If you prepay ₹2,00,000 on a ₹20,00,000 loan, your next month's interest is calculated on ₹18,00,000 instead of ₹20,00,000 (approximately ₹1,500 less in that month alone). This benefit compounds throughout the remaining tenure, generating much larger cumulative savings.
Monthly repayments reduce the principal faster because payments are made more frequently, leaving less time for interest to compound on the outstanding balance. Quarterly payments mean interest accumulates for 3 months before the balance is reduced, resulting in slightly higher total interest cost over the loan tenure. For the same loan amount and rate, monthly payments are always more efficient than quarterly payments.
Yes. The annual summary from your amortization schedule shows exactly how much interest and principal you paid in each financial year. For home loans: principal repayment is deductible under Section 80C (up to ₹1.5 lakhs), and interest is deductible under Section 24(b) (up to ₹2 lakhs for self-occupied property, unlimited for let-out property). Your bank typically issues a home loan interest certificate each year which should match the interest column in your amortization schedule.
For floating-rate loans linked to EBLR (External Benchmark Lending Rate), any rate change immediately affects your EMI calculation. Banks typically adjust by either changing the EMI amount or changing the remaining tenure while keeping the EMI constant. When rates change, request a new amortization schedule from your bank to see the updated interest and principal breakdown for the remaining tenure.