Finance Calculators — Loan, EMI, Tax & SIP Tools

How is a loan EMI actually calculated?

The standard amortisation formula sets the payment so that the loan balance reaches zero after the final period. Each payment covers that period's interest first, and whatever is left reduces the principal — which is why the interest share falls and the principal share rises over the term. The calculator shows that split for every period rather than only the final total.

What happens to the total cost if I prepay part of a loan?

Prepayment always reduces the principal, so it removes the interest that principal would have accrued for the rest of the term. The saving is far larger in the early years, when most of each payment is still interest. Running the schedule with and without the prepayment shows the difference in total interest directly.

Does a lower interest rate always mean a cheaper loan?

Not on its own. Fees, the repayment frequency and how long you actually keep the loan all change the total. Two offers with different rates can swap places once fees and term are included, so compare total cost — not just the rate — before deciding.