# EMI Calculator

> EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1), where P is the loan, r the monthly interest rate and n the number of months. Early EMIs are mostly interest; the principal share rises over time, which is why prepayments in the first few years save the most interest.

Interactive calculator: https://www.industax.com/calculators/emi

- **₹10 lakh at 10% for 5 years:** EMI ₹21,247
- **Home-loan interest deduction:** Up to ₹2 lakh (old regime)
- **Prepayment:** Cuts interest most early on

## What changes your EMI

| Change | Effect |
| --- | --- |
| Higher interest rate | Higher EMI and total interest |
| Longer tenure | Lower EMI, much higher total interest |
| Part-prepayment | Lower EMI or shorter tenure; saves interest |
| Floating rate reset | Banks usually extend tenure unless you ask for higher EMI |

## Tax benefits on loans

- Home loan (self-occupied): interest up to ₹2 lakh under Section 24(b) and principal within 80C — old regime
- Let-out property: interest deductible against rent in both regimes; loss set-off against other income limited
- Business loans: interest is a business expense
- Education loan: interest deductible under 80E for 8 years — old regime
- Personal and car loans for personal use: no deduction

## Worked example: ₹10 lakh business loan

1. Loan ₹10,00,000 at 10% a year for 5 years (60 months); monthly rate 0.8333%.
2. EMI = ₹21,247.
3. Total paid = ₹12,74,823; total interest = ₹2,74,823.

**Result:** Interest is about 27% of the loan amount over 5 years.

## FAQs

### Is it better to reduce EMI or tenure after prepayment?

Reducing tenure saves more interest; reducing EMI improves monthly cash flow. If cash flow is comfortable, choose shorter tenure.

### Are there prepayment charges on floating-rate loans?

RBI rules prohibit foreclosure and prepayment charges on floating-rate loans to individuals for non-business purposes. Fixed-rate and business loans may carry charges.

### Can I claim home-loan interest in the new regime?

Not for a self-occupied house. For a let-out house, interest is deductible against rental income, but a loss can't be set off against other income in the new regime.

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Canonical page: https://www.industax.com/calculators/emi
Publisher: Indus Tax — CA-led tax and compliance firm (https://www.industax.com). Contact: info@industax.com, 9059139258.
This is general information, not advice for your specific facts.