What an Amortization Schedule Shows and How It Is Built
An amortization schedule is the month-by-month table that shows exactly how each loan instalment splits between interest and principal, and what you still owe afterwards. Lenders call it a repayment schedule and usually hand it over as a PDF once a home loan is sanctioned. This calculator rebuilds that table from three inputs — the loan amount, the annual interest rate and the tenure — and adds the part lenders rarely show you: what happens when you pay extra. Homebuyers use it to see how front-loaded the interest really is, borrowers comparing two offers use it to total the true interest cost rather than trusting the headline rate, and anyone weighing a prepayment uses it to decide whether that money does more good against the loan or somewhere else.
The instalment comes from the reducing-balance formula EMI = P × r × (1+r)ⁿ ÷ ((1+r)ⁿ − 1). P is the principal you borrow, r is the monthly interest rate — the quoted annual rate divided by 12 and then by 100, so 9% per year becomes 0.0075 per month — and n is the number of instalments, which is the tenure in years times 12. Once the EMI is fixed, every month repeats three steps: the month's interest equals the outstanding balance times r, the principal repaid equals the EMI minus that interest, and the balance falls by that principal. Because the balance shrinks, next month's interest is smaller and a larger slice of the same EMI attacks principal. Balances are held at full floating-point precision across all n months and rounded only when a row is drawn, which is why the last row closes at exactly zero rather than a stray paisa.
Take a ₹10,00,000 loan at 9% per annum for 20 years. The monthly rate is 0.0075 and n is 240, so the EMI works out to ₹8,997.26. In month one, interest is ₹10,00,000 × 0.0075 = ₹7,500, leaving only ₹1,497.26 to reduce the balance — barely a seventh of what you paid. By month 240 that has flipped almost completely: interest is under ₹70 and nearly the whole instalment is principal. Across the full term you pay ₹21,59,342.29, of which ₹11,59,342.29 is interest — more than the loan itself. Now add ₹5,000 extra every month and the same loan closes in 152 months instead of 240, saving 88 instalments and roughly ₹4.6 lakh of interest, because every extra rupee removes all the future interest that rupee would have carried.
The schedule earns its keep in a few specific situations. A homebuyer choosing between a 15-year and a 20-year tenure can see that the shorter term raises the EMI but cuts total interest sharply, which no single EMI figure reveals. A borrower who has just received an annual bonus can test a one-time lump sum at month 30 against the same amount invested, using the interest-saved figure as the return the prepayment guarantees. Someone claiming a home-loan interest deduction under Section 24(b) needs the interest paid in a specific financial year, which is exactly what the yearly view sums. And a small-business owner servicing a term loan can export the CSV into a cash-flow sheet so each month's interest lands in the right accounting period.
One pitfall trips up almost everyone: prepaying early is worth far more than prepaying late. The same ₹1,00,000 paid in year two of a 20-year loan saves several times the interest it would save in year fifteen, because it cancels interest for the remaining 216 months instead of 60. Before you commit, check whether your loan carries a prepayment penalty — the Reserve Bank of India bars foreclosure charges on floating-rate retail loans, but fixed-rate loans can still attract them. Also remember this schedule assumes a fixed rate for the whole term; a floating rate will move, so treat the totals as a planning baseline and rebuild the table after each reset. Everything is computed in your browser, and your loan figures are never uploaded or stored.
