Tools To India

Loan Interest Calculator

The EMI tells you what you pay each month. This tells you what the loan actually costs — and what you would save by shortening it.

Last updated

₹15 Lakh

See what a shorter or longer tenure would cost.

The result updates as you type. Nothing you enter is saved, sent to a server or shared.

Total interest you will pay

₹13,19,407

That is 88% of the amount you borrowed

Where your repayments go

  • Principal: ₹15,00,000
  • Interest: ₹13,19,407
Monthly EMI
₹15,663.37
Total amount repaid
₹28,19,407
Interest share of repayment
46.8%

If you took 10 years instead

EMI would be₹3,746 more each month
₹19,409.63
Total interest would be
₹8,29,156
Interest saved
₹4,90,251
  • Assumes a fixed rate for the full tenure, no prepayment, and no fees or insurance financed into the loan.

How the balance falls, year by year

How the balance falls, year by year
YearPrincipal paidInterest paidBalance left
1₹47,493₹1,40,467₹14,52,507
2₹52,207₹1,35,754₹14,00,300
3₹57,388₹1,30,572₹13,42,912
4₹63,084₹1,24,877₹12,79,829
5₹69,345₹1,18,616₹12,10,484
6₹76,227₹1,11,734₹11,34,257
7₹83,792₹1,04,168₹10,50,465
8₹92,108₹95,852₹9,58,357
9₹1,01,250₹86,711₹8,57,107
10₹1,11,299₹76,662₹7,45,809
11₹1,22,345₹65,616₹6,23,464
12₹1,34,487₹53,473₹4,88,977
13₹1,47,835₹40,126₹3,41,142
14₹1,62,507₹25,454₹1,78,635
15₹1,78,635₹9,325₹0

How this calculator works

Most loan calculators answer "what will I pay each month?". This one answers the question that decides whether a loan is worth taking: what does the borrowing itself cost, and how much of that is avoidable?

The total interest on a reducing-balance loan is simply the sum of all instalments minus the amount borrowed. What makes it surprising is how steeply it rises with tenure. Doubling the tenure of a long loan can more than double the interest, because you are borrowing the same principal for twice as long and the balance falls more slowly throughout.

The comparison panel exists because the trade-off is rarely obvious from the EMI alone. A shorter tenure raises the monthly payment by a modest amount and cuts total interest by a large one. Seeing both figures side by side is usually more persuasive than any general advice.

The formula

Total interest

Total interest = (EMI × number of instalments) − principal

Because the EMI is fixed and the tenure is known, total interest falls straight out of the instalment. The year-by-year table is built by running the actual amortisation, so the final instalment absorbs rounding exactly as a lender’s schedule does.

Interest in any single month

Interest this month = outstanding balance × (annual rate ÷ 12 ÷ 100)

This is why prepaying early saves so much more than prepaying late: it removes principal that would otherwise have been charged interest for many remaining months.

Worked example: ₹15 lakh at 9.5% — 15 years versus 10

Sanjay is offered ₹15,00,000 at 9.5%. He is deciding between a 15-year and a 10-year tenure.

Step-by-step calculation for the worked example
Loan amount₹15,00,000
Rate9.5% a year
EMI over 15 years₹15,663
Total interest over 15 years₹13,19,377
EMI over 10 years₹19,410
Total interest over 10 years₹8,29,157
Extra paid each month for the shorter loan₹3,747
Interest saved₹4,90,220

Paying ₹3,747 more a month for ten years costs Sanjay about ₹4.5 lakh in extra instalments during that period, and saves him roughly ₹4.9 lakh in interest while ending the loan five years sooner. Whether that trade is right depends entirely on whether the higher instalment is comfortable.

Things worth knowing

  • Interest is front-loaded. On a 20-year loan, well over half of everything paid in the first five years is interest — which is precisely why early prepayment is so effective.
  • The comparison assumes the rate is the same for both tenures. Lenders sometimes price longer tenures slightly higher, which widens the gap further.
  • Fees, insurance premiums bundled into the loan, and GST on charges are excluded here. They can add a meaningful amount to the true cost, especially on smaller loans.
  • On a floating-rate loan, the total interest shown is a projection at today’s rate. If the benchmark rises and the lender extends the tenure rather than raising the EMI, the actual interest paid will be higher than this figure.
  • A loan that looks cheap because the EMI is small is often the most expensive one available. Compare total interest, not instalments.

Frequently asked questions

Why is so much of my early EMI going to interest?
Because interest is charged on what you still owe, and at the start you owe almost everything. As the balance falls, the interest charged each month falls with it and more of the fixed instalment goes to principal. The shift is gradual at first and accelerates towards the end.
Is it better to reduce the EMI or the tenure when I prepay?
Reducing the tenure saves considerably more interest, because you keep paying the same amount but for fewer months. Reducing the EMI improves monthly cash flow instead. Lenders usually default to keeping the EMI and cutting the tenure, but confirm which one they have applied.
Does the total interest change if I pay a few days late?
Yes, slightly — interest accrues daily on most loans, and a late payment also attracts penal charges and is reported to credit bureaus. The interest impact of a single late payment is small; the credit-score impact is not.
How do I compare two loan offers properly?
Compare the total amount repaid over the same tenure, including processing fees and any insurance you are required to buy. Two loans with the same headline rate can differ meaningfully once fees are counted, and a lower rate with a longer tenure can easily cost more overall.

Sources

Every figure on this page is traceable to the official source below. If a source has changed since the date shown, please tell us and we will correct it.

  • Reserve Bank of India · Last verified 9 August 2026

    Lending norms, the external benchmark framework and the policy repo rate.