Question 1

What is EMI and how is it calculated?

Accepted Answer

EMI stands for Equated Monthly Installment. It is the fixed monthly payment made to a bank or financial institution to repay a loan. EMI is calculated using the formula: EMI = P × r × (1 + r)^n / ((1 + r)^n - 1), where P is the principal loan amount, r is the monthly interest rate (annual rate / 12 / 100), and n is the loan tenure in months.

Question 2

What is the difference between Reduce EMI and Reduce Tenure?

Accepted Answer

When you make a prepayment on your loan, you have two options: Reduce Tenure keeps your monthly EMI the same but shortens the loan duration, resulting in maximum interest savings. Reduce EMI keeps the tenure the same but lowers your monthly EMI amount, providing immediate cash flow relief. Reduce Tenure typically saves more interest over the loan lifetime, while Reduce EMI helps if you need lower monthly payments.

Question 3

How much can I save with home loan prepayment?

Accepted Answer

The savings from home loan prepayment depend on the prepayment amount, timing, and strategy chosen. For example, on a ₹50 lakh home loan at 8.5% for 20 years, making quarterly prepayments of ₹1 lakh with Reduce Tenure strategy can save over ₹20 lakhs in interest and reduce your loan tenure by 8-10 years. Earlier prepayments save more interest as the outstanding principal is higher.

Question 4

Should I choose Reduce EMI or Reduce Tenure for home loan prepayment?

Accepted Answer

Choose Reduce Tenure if you want to become debt-free faster and save maximum interest. This is best when your monthly income comfortably covers the current EMI. Choose Reduce EMI if you need immediate cash flow relief or have other financial goals requiring lower monthly commitments. For most borrowers, Reduce Tenure is recommended as it leads to significantly higher interest savings.

Question 5

How does EMI calculator work for home loan, car loan, and personal loan?

Accepted Answer

Our EMI calculator works for all types of loans - home loan, car loan, personal loan, and education loan. Simply enter the loan amount, annual interest rate, and loan tenure. The calculator instantly shows your monthly EMI, total interest payable, total payment amount, and detailed amortization schedule. You can also add prepayments to see how much interest you can save.

Question 6

What are the current home loan interest rates in India 2026?

Accepted Answer

As of early 2026, home loan interest rates in India range from 8.25% to 9.5% depending on the bank, loan amount, and borrower profile. SBI offers rates starting at 8.25%, HDFC from 8.35%, and ICICI from 8.40%. Use our EMI calculator to compare how different interest rates affect your monthly EMI and total interest outgo.