Home Loan Amortization Calculator India

Loan Amortization Formula:

\[ PMT = P \times \frac{r \times (1 + r)^n}{(1 + r)^n - 1} \]

Monthly Payment (PMT):

Total Payment:

Total Interest:

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1. What is Home Loan Amortization?

Home loan amortization is the process of paying off a mortgage loan over time through regular payments. In India, home loans typically follow an EMI (Equated Monthly Installment) structure where each payment covers both principal and interest.

2. How Does the Calculator Work?

The calculator uses the standard amortization formula:

\[ PMT = P \times \frac{r \times (1 + r)^n}{(1 + r)^n - 1} \]

Where:

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

Explanation: The formula calculates the fixed monthly payment required to fully amortize the loan over its term, accounting for compound interest.

3. Importance of Loan Amortization

Details: Understanding amortization helps borrowers see how much of each payment goes toward principal vs. interest, plan prepayments, and compare loan offers from different banks in India.

4. Using the Calculator

Tips: Enter the principal amount in INR, annual interest rate (as offered by Indian banks), and loan tenure in years. The calculator will show your EMI, total payment, and total interest.

5. Frequently Asked Questions (FAQ)

Q1: What is EMI in Indian home loans?
A: EMI (Equated Monthly Installment) is the fixed payment amount a borrower makes each month to repay the home loan.

Q2: How does prepayment affect my loan?
A: Prepayment reduces the principal amount, which can either shorten your loan term or reduce your EMI if you opt for term reduction.

Q3: Are there tax benefits on home loans in India?
A: Yes, under Section 24(b) for interest paid (up to ₹2 lakh for self-occupied property) and Section 80C for principal repayment (up to ₹1.5 lakh).

Q4: What is the typical home loan tenure in India?
A: Most Indian banks offer home loans with tenures from 5 to 30 years, depending on age and income.

Q5: How is interest calculated in Indian home loans?
A: Indian banks typically use monthly reducing balance method, where interest is calculated on the outstanding principal each month.