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Finance & Business · pattern A, Numeric fields

Equated monthly instalment, and where it goes.

Enter loan amount, rate and tenure for the EMI, the total interest and the split between principal and interest in the first instalment.

Inputs

The formula used

EMI = P·i(1 + i)ⁿ ÷ ((1 + i)ⁿ − 1)

i is the monthly rate and n the number of months. The instalment stays constant; its composition shifts from interest toward principal over the tenure.

EMI

16,801.49

Total payable
1,008,089.34
Total interest
208,089.34
Interest in the first EMI
6,333.33
Principal in the first EMI
10,468.16
Interest share of total payment
20.64 %
EMI at a 1% lower rate
16,413.23

The instalment is constant; its composition is not.

Early instalments are dominated by interest because it is charged on the whole outstanding balance; late ones are almost entirely principal. This is why the balance falls slowly at first and why prepaying early saves far more interest than prepaying near the end of the tenure.

Questions about emi

What is an amortisation schedule?
A month-by-month table showing how each EMI splits between interest and principal, and the balance remaining. Lenders provide one on request.
Does prepayment reduce the EMI or the tenure?
Either, depending on the lender's policy — reducing the tenure saves more interest. Ask which applies before prepaying.
Why is the first instalment mostly interest?
Because interest is charged on the full outstanding balance, which is at its largest at the start.

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