Loan Terms First
The calculator starts with your loan amount, tenure, and interest rate to compute the fixed monthly EMI.
How The EMI Calculator Works
Arthvya keeps the EMI calculation visible: first the straightforward EMI and schedule, then the full picture — rate risk, prepayment, tax, and affordability — in Real mode.
EMI Basics
An EMI (Equated Monthly Installment) is the fixed amount you pay every month to repay a loan — a mix of interest and principal — until the loan is fully repaid at the end of the tenure.
Full Amortization
Every month is broken into interest and principal, rolled up into a yearly schedule you can expand into monthly detail.
Rate-Change Scenarios
Model a hypothetical repo-rate-driven change and see whether your tenure or your EMI would move.
Prepayment Simulator
See exactly how much interest a one-time, yearly, or monthly extra payment saves.
Tax Benefit Estimate
Section 24(b) and 80C deductions are estimated only when you select the Old tax regime.
Affordability Check
Compares your EMI against your income using a common FOIR guideline.
Simple vs Real Mode
Simple Mode
Simple mode shows your EMI, total interest, total payment, and the full amortization schedule from your loan amount, tenure, and rate.
Real Mode
Real mode adds four independent “what if” views on top of the same base loan: a rate-change scenario, a prepayment simulator, a home loan tax benefit estimate, and an affordability check against your income — plus how your fixed EMI's real value declines with inflation.
EMI Formula
EMI = P x r x (1 + r)n / ((1 + r)n - 1)
- P: loan amount (principal)
- r: interest rate per month, as a decimal (annual rate / 12 / 100)
- n: total number of monthly instalments (tenure in years x 12)
Amortization Schedule
Every month, interest is charged on the outstanding balance, and the remainder of the EMI reduces the principal:
interest = openingBalance x monthlyRate
principal = EMI - interest
closingBalance = openingBalance - principal
Because interest is charged on a shrinking balance, the interest portion of your EMI is highest in the first year and lowest in the last — most of the balance reduction happens toward the end of the tenure.
Rate-Change Scenarios
Most Indian home loans are floating-rate, linked to the repo rate under the External Benchmark Lending Rate (EBLR) framework, and reset at least once a quarter. When the rate changes, lenders typically use one of two strategies:
Keep EMI same (default)
The remaining tenure is recalculated instead of the EMI:
n = ln( E / (E - r x B) ) / ln(1 + r)
Where B is your outstanding balance, r is the new monthly rate, and E is the current EMI. If the EMI can no longer cover the new monthly interest, this isn't solvable — the lender would have to raise the EMI instead.
Keep tenure same
The EMI is recalculated on the outstanding balance and remaining tenure using the same EMI formula, at the new rate.
Prepayment Math
A prepayment plan (one-time, yearly, or monthly) reduces your outstanding balance ahead of schedule, in addition to your regular EMI. Arthvya recomputes the full amortization schedule with the prepayment applied, then compares it with your base schedule to show:
Interest saved
The difference in total interest paid between the base schedule and the prepayment-adjusted schedule.
Tenure reduced
How many months earlier the loan closes because of the extra payments.
Because interest is front-loaded, the same prepayment amount saves more interest the earlier it's made in the loan's life.
Tax & Affordability
Home Loan Tax Benefit
Under the Old tax regime (FY 2026-27), interest on a self-occupied home loan is deductible under Section 24(b) up to ₹2,00,000 per year, and principal repayment is deductible under Section 80C up to ₹1,50,000 per year (a bucket shared with other 80C investments). The New regime does not allow either deduction — the calculator shows ₹0 benefit when you select it.
Affordability (FOIR guideline)
The calculator compares your EMI with your monthly take-home income. As a general guideline, many lenders prefer your combined EMIs (Fixed Obligation to Income Ratio) to stay under roughly 40-50% of income — comfortable below 35%, stretched between 35-50%, and risky above 50%.
Inflation-Adjusted EMI
Your EMI stays fixed in rupee terms. Real mode discounts that fixed EMI by your inflation assumption each year to show how it would feel in today's money, assuming your income broadly keeps pace with inflation.
Important Notes
Actual lender behavior on rate resets, prepayment charges (some floating-rate loans have none, but check your agreement), foreclosure rules, TDS, surcharge, cess, and personal tax details can differ from this planning estimate.
Reference rate figures shown elsewhere on this calculator are static, manually-updated values — not a live RBI or bank feed.
This page explains the calculator logic for transparency. It is for planning and education only, not financial, tax, or lending advice.
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