## How to calculate home loan EMI?

You can calculate your home loan EMIs using our Home Loan EMI Calculator. All you have to do is select the loan amount, interest rate, and tenure. The home loan calculator will show your EMI payable, total interest, and the total amount payable including the interest and principal amount.

## You can also calculate your home loan EMIs manually using the below formula

### Home loan EMI calculation formula

EMI = P x R x (1+R)^N / [(1+R)^N-1]

where, P = Principal amount, N = Loan tenure in months, and R = Monthly interest rate

### Home loan EMI calculation example

If the annual rate of interest is 6%, the value of ‘R’ will be 6/ (12 x 100) = 0.005
On availing of a home loan of Rs. 40 lakh at an annual interest rate of 6.00% for a tenure of 240 months (20 years), the EMI will be calculated as:

EMI = 40,00,000 * 0.005 * (1 + 0.005)240 / ((1 + 0.005)240 - 1) = Rs. 28,657

• The total payable amount to lender is Rs. 28,657 * 240 months = Rs. 68,77,800
•  The principal loan amount is Rs. 40 lakh
• The Interest to be paid is Rs. 28,77,800

## Home Loan Amortization Schedule

Assuming you are taking a home loan for Rs. 30 lakh for a tenure of 30 years at an interest rate of 8.50%. Below could be the sample amortization table for the same.

 Year Opening Balance EMI*12 Interest paid yearly Principal paid yearly Closing Balance 1 30,00,000 2,76,809 2,54,130 22,679 29,77,321 2 29,77,321 2,76,809 2,52,125 24,683 29,52,638 3 29,52,638 2,76,809 2,49,944 26,865 29,25,772 4 29,25,772 2,76,809 2,47,569 29,240 28,96,532 5 28,96,532 2,76,809 2,44,984 31,824 28,64,708 6 28,64,708 2,76,809 2,42,171 34,637 28,30,071 7 28,30,071 2,76,809 2,39,110 37,699 27,92,371 8 27,92,371 2,76,809 2,35,778 41,031 27,51,340 9 27,51,340 2,76,809 2,32,151 44,658 27,06,682 10 27,06,682 2,76,809 2,28,203 48,606 26,58,076 11 26,58,076 2,76,809 2,23,907 52,902 26,05,175 12 26,05,175 2,76,809 2,19,231 57,578 25,47,597 13 25,47,597 2,76,809 2,14,142 62,667 24,84,930 14 24,84,930 2,76,809 2,08,602 68,206 24,16,723 15 24,16,723 2,76,809 2,02,574 74,235 23,42,488 16 23,42,488 2,76,809 1,96,012 80,797 22,61,691 17 22,61,691 2,76,809 1,88,870 87,939 21,73,752 18 21,73,752 2,76,809 1,81,097 95,712 20,78,041 19 20,78,041 2,76,809 1,72,637 1,04,172 19,73,869 20 19,73,869 2,76,809 1,63,429 1,13,380 18,60,489 21 18,60,489 2,76,809 1,53,408 1,23,401 17,37,088 22 17,37,088 2,76,809 1,42,500 1,34,309 16,02,779 23 16,02,779 2,76,809 1,30,628 1,46,180 14,56,599 24 14,56,599 2,76,809 1,17,707 1,59,102 12,97,497 25 12,97,497 2,76,809 1,03,644 1,73,165 11,24,333 26 11,24,333 2,76,809 88,338 1,88,471 9,35,862 27 9,35,862 2,76,809 71,679 2,05,130 7,30,732 28 7,30,732 2,76,809 53,547 2,23,262 5,07,470 29 5,07,470 2,76,809 33,813 2,42,996 2,64,474 30 2,64,474 2,76,809 12,334 2,64,474 0

## Factors that affect your Home Loan EMI

Below are the major factors that affect the EMI of your home loan:

### 1. Principal Amount

The principal refers to the amount you borrow from the lender. It is directly proportional to your EMIs, i.e., the lower the principal, the lower will be your monthly installments and vice versa. You can use the home loan eligibility calculator to know the principal amount you are eligible for.

### 2. Rate of interest

The home loan interest rate is the rate at which the lender offers you the home loan. It is also directly proportional to the value of your home loan EMIs.

### 3. Tenor

Tenor is one of the most important factors when you are doing Home Loan EMI Calculation. It is the time within which you repay your home loan. It is inversely proportional to your loan EMIs, i.e., the longer the tenor, the smaller your EMIs. But it is important to remember that a longer tenor translates to a high interest outgo.

What is a home loan EMI?

The word EMI stands for ‘Equated Monthly Installment’. It refers to the sum you have to pay every month towards the repayment of your home loan. It includes the principal amount as well as interest. The EMI varies as per the loan amount, interest rate and tenure. You can reduce your home loan EMIs by increasing your tenure. We offer a tenure of up to 40 years.

What is a home loan EMI calculator?

A home loan EMI calculator is a financial planning tool that assists you to make an informed decision by helping you to estimate EMIs payable towards your home loan, before applying.

When will my home loan EMI be due?

As the term rightly suggests, Equated Monthly Instalments (EMI) are due every month, and gradually reduce the principal borrowed throughout the selected tenure. You are obligated to pay your housing loan EMI on a fixed date every month, which is set at the time of loan disbursal. Missing an EMI payment could lead to penal charges, and will also impact your credit score.

What is a home loan Pre-EMI?

Housing loans are one of the most flexible credit options that are available to borrowers, to fund the purchase of a residential property. Often, depending on the borrower’s requirements, the lender can disburse the home loan amount in parts. Till the full loan amount isn’t disbursed to you, you are required to repay only the interest component of the principal loan amount. The amount you pay as the home loan EMI in the meanwhile is also called a home loan pre-EMI.

Borrowers only start paying full home loan EMIs, once the home loan principal amount is fully disbursed to them. Typically, a home loan tenure can stretch up to 30 years, giving borrowers the flexibility of choosing a repayment schedule as per their convenience.

What are the tax benefits of paying home loan EMIs?

A home loan is a tax-benefit credit option, which is also why many choose to buy a second property as an investment – allowing them to avail of home loan tax benefits through their second home loans as well. There are several tax benefits and concessions attached to paying home loan EMIs, such as:

Section 80C: You can claim a tax rebate on the principal component of your home loan EMI, up to Rs. 1.5 lakh every year
Section 24(b): You can claim a tax rebate on the interest component of your home loan EMI, up to Rs. 2 lakh every year
Section 80EE: You can claim a tax rebate on the interest component of your home loan, after you have exhausted the claimed cap under Section 24(b), up to Rs. 50,000, only if you are a first-time home buyer

You can calculate total tax payable based on your taxable income, expenses, age, investments and interest paid towards your home loan through income tax calculator.

How does home loan repayment work?

Home loan repayment refers to the process of paying back your entire loan (principal plus interest) to the lender over the agreed-to timeframe. Your repayment primarily depends on the selected tenure and the timely payment of your Equated Monthly Instalments (EMI). Your EMI amount depends on the loan amount, the tenure chosen, and the home loan interest rate.

To repay your loan earlier than planned, you will need to make part prepayments or completely foreclose the loan with one lump sum payment. In case you have surplus funds and choose to become debt-free sooner, use our home loan foreclosure calculator to know the sum payable. This is important as a home loan is a sizable sum, which necessitates planning and research.

How can I reduce my home loan EMI?

There are several ways in which borrowers can reduce their home loan EMIs, with Bajaj Finserv. Eligible applicants who meet the home loan criteria can benefit from lower interest rates and longer tenure – bringing down their total cost of borrowing. Here are a few ways to help reduce home loan EMIs:

• Scale up your down payment amount
• Focus on boosting your credit profile and CIBIL score
• Ensure maximum repayment capacity
• Pay off all pending dues and obligations
• Apply with a co-applicant to enhance your home loan application
• Select the right property that passes the lender’s verification

You can also avail of a home loan balance transfer and transfer your pending home loan balance to Bajaj Finserv and repay the rest of your loan amount at a reduced EMI.

How do you calculate interest rate on a home loan?

An error-free and easy way to calculate interest on your home loan is by using the home loan EMI calculator. All you must do is open the home loan interest rate calculator tool available on the Bajaj Finserv website and enter the fields such as the interest rate, principal amount, and tenure. When you enter all the values correctly, you will not only find out the amount you will pay as interest but also the EMIs and the total loan payable by the end of your tenure.

What is a Home Loan Amortization Schedule?

The home loan amortization schedule is a record of all the periodic payments on your home loan. It is the total tally of loan payments showing the amount of interest and principal contained in each payment until the entire loan is repaid.

The home loan EMI calculator shows you the amortization table, broken down to show you the details of your ongoing home loan interest rate, principal amount, repayment tenure, and balance repayment amount.

What is the impact of part-prepayments on your EMI?

The part-prepayment facility on your home loan helps you to reduce your home loan EMIs. By making part-prepayments, you can save substantially on the overall interest payment, as you repay the full amount well before the end of the repayment tenure and you can calculate it through home loan prepayment calculator.

Is it good to reduce home loan EMI or tenure?

Existing home loan borrowers and new ones all have the same question, which is – what will bring down the cost of borrower faster – smaller EMIs, or a short tenor? There are several points to consider while making that choice.

How can I repay my home loan faster?

A home loan is a sizeable financial commitment and taking on one could mean that you will be repaying the loan amount for almost 25 to 30 years of your life. While the home loan repayment is still feasible and can continue along with your other financial developments, one can choose to repay their home loan faster, if their budget and repayment capacity allows for it. Here are two ways to do it:

How is the principal and interest component split, in an EMI?

The amount you pay as home loan EMI is made up of the home loan principal and home loan interest in parts. However, where you stand in your repayment tenure also plays a role in deciding how much of the home loan EMI is composed of the principal amount and how much is the home loan interest.

If you wish to see your EMI break-up, you can do so in two ways:

• Manual calculations
• Home loan EMI calculator

Manual calculations have a wider margin of error, as the formula is complex, and with bigger numbers, one may make mistakes in the calculations. Here is the formula to calculate the same:

Interest component = P x R

Where,

P is the pending principal loan amount

R is the home loan interest rate

And then, you can subtract the interest amount out of the EMI, to arrive at the principal component.

To complete these calculations without any errors, make use of an EMI calculator and get error-free results in seconds.

When does my home loan EMIs start?

Your home loan Equated Monthly Installments (EMIs) start from the month following the disbursement of the loan amount. The exact date may vary depending on the terms and conditions specified by your lender.