🏦 Finance Tool

Amortization Calculator

Calculate your monthly payment, total interest, and view the complete amortization schedule — with extra payment analysis to see how much you save.

Loan amount

₹

Annual interest rate: 8.5%

8.5%

Loan tenure: 20 yrs

20 yr

yrs

⚡ Extra monthly payment (optional — see interest saved)

₹

💳 Monthly EMI

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—Principal

—Total interest

—Total payment

—Effective rate

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Principal

Principal—

Total Interest—

Interest Ratio—

Balance over time

Full amortization schedule

#PaymentInterestPrincipalBalance

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Money-saving tip

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How amortization works

In an amortizing loan, each payment covers two things: interest on the remaining balance, and a portion that reduces (pays off) the principal. Early payments are mostly interest; late payments are mostly principal. The total payment (EMI) stays constant throughout.

Monthly payment (EMI): M = P × r(1+r)ⁿ / ((1+r)ⁿ−1)
where: P = principal, r = monthly rate = annual rate/12, n = months

Making extra payments reduces the principal faster, meaning less interest accrues each subsequent month — compounding your savings over time.

Frequently asked questions

What is an amortization schedule?

An amortization schedule is a complete table of every loan payment — showing how much goes to interest, how much reduces the principal, and what the remaining balance is after each payment. It helps you visualise exactly how your loan gets paid off month by month.

How much can extra payments save?

Extra payments go entirely toward principal, cutting interest charged in all subsequent months. Even a small extra payment can save a surprisingly large amount over the life of the loan. Use the extra payment field above to see your exact savings.

Why is so much of the early payment interest?

Interest is calculated on the remaining balance. Early in the loan, the balance is high, so interest charges are high and little goes to principal. This reverses over time — by the final payments, almost nothing goes to interest.

What is the difference between EMI and amortization?

EMI (Equated Monthly Instalment) is the fixed monthly payment amount. Amortization is the process by which those payments gradually reduce the loan balance to zero. Every EMI is split between interest and principal according to the amortization schedule.