How your EMI is calculated
The formula is EMI = P × i × (1+i)^n ÷ ((1+i)^n − 1), where P is the loan amount, i is the monthly rate and n is the number of monthly payments. It is the unique fixed payment that reduces the loan to exactly zero on the final month.
Because interest accrues on the outstanding balance, a longer tenure means lower payments but far more total interest. A 100,000 loan at 9% over 20 years costs about 900 a month, and the total interest paid is around 116,000, more than the loan itself.
Reading the amortization schedule
The schedule splits each year's payments into principal and interest. In year one of a 20-year loan at 9%, roughly three quarters of your money goes to interest. The crossover, where more of each payment repays principal than interest, typically arrives about two thirds of the way through.
This is why prepaying early is so powerful: any extra principal repaid in the first years would otherwise have accrued interest for decades.
Choosing a tenure
Pick the shortest tenure whose payment you can comfortably afford after essentials and savings. A common guideline keeps all loan payments under 40% of take-home income. Use the tenure slider to see the trade-off between monthly comfort and total cost.