1. What is the Home Loan Repayment Formula?

The PMT formula calculates the fixed monthly payment required to repay a loan over a specified term, including both principal and interest components. It's commonly used for government-backed home loans like India's PMAY with SBI.

2. How Does the Calculator Work?

The calculator uses the PMT formula:

Where:

• \( P \) — Principal loan amount (INR)
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Total number of payments (loan term in years × 12)
• \( PMT \) — Monthly payment amount (INR)

Explanation: The formula accounts for compound interest over the loan term, calculating a fixed payment that covers both principal and interest each month.

3. Importance of Loan Repayment Calculation

Details: Accurate repayment calculation helps borrowers understand their financial commitment, plan their budget, and compare different loan options before applying for government home loan schemes.

4. Using the Calculator

Tips: Enter principal amount in INR, annual interest rate in percentage (e.g., 7.5 for 7.5%), and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is a typical interest rate for government home loans?
A: Rates vary but are often subsidized. For example, PMAY with SBI offers rates around 7.50% p.a. (as of 2025).

Q2: How does loan term affect payments?
A: Longer terms reduce monthly payments but increase total interest paid. Shorter terms have higher monthly payments but lower total interest.

Q3: Are there other costs besides principal and interest?
A: Yes, government loans may have processing fees, insurance, and other charges not included in this calculation.

Q4: Can I prepay my government home loan?
A: Most government schemes allow prepayment, often without penalty. Check specific scheme rules for details.

Q5: How accurate is this calculator?
A: It provides standard EMI estimates. Actual payments may vary slightly due to rounding or specific scheme features.