Amortization Calculator

What is an amortization schedule?

An amortization schedule is a detailed table showing every payment over your loan life, breaking down how much goes to principal versus interest each month. It reveals that early payments are mostly interest while later payments are mostly principal. This schedule helps you understand true loan costs and optimal prepayment timing.

Why is most of my early EMI going to interest?

Loans calculate interest on outstanding principal balance. Early on, your principal is highest, so interest is highest. As you repay principal over time, interest charges decrease while your EMI stays constant, meaning more goes to principal. This front-loading of interest explains why prepaying early saves dramatically more than prepaying late.

How do prepayments affect my amortization schedule?

Prepayments directly reduce principal, which decreases interest on all future payments. You can either reduce EMI (keeping tenure same) or reduce tenure (keeping EMI same). Reducing tenure saves more total interest. A ₹5 lakh prepayment on a ₹50 lakh loan can cut years off your loan and save lakhs in interest.

Can I use amortization schedules for tax planning?

Yes, schedules show exactly how much interest you'll pay each year, helping you plan Section 24 deductions (up to ₹2 lakhs). You'll see when interest deduction drops below the limit, which might inform your new vs old tax regime choice. Schedules also show principal repayment for Section 80C planning within the ₹1.5 lakh limit.

How often should I review my amortization schedule?

Review annually or when making prepayments to track progress and plan future prepayments. After each prepayment, generate a new schedule reflecting reduced principal. This helps you visualize how much faster you're reducing debt and motivates continued prepayment. Some people review quarterly to stay engaged with their loan reduction progress.