Visual EMI Calculator
Loan
Home
Car
Business
Gold
Education
Property
Commercial Vehicle
Personal
Two-Wheeler
Home Loan EMI Calculator by Reducing Balance
EMI
Reducing Balance
Interest First
Deferred Payment
Balloon Payment
Loan Amount
Loan Tenure
Year
Month
Rate of Interest
%
Copy
Share
EMI
10143
Interest
825680
Principal
1000000
Total
1825680
825 K
(8 Lac)
15
Year
1,000,000
509 K
(5 Lac)
Year
Original
Reduced
𝒊
10143
will be
EMI
for
1000000
(1 m/10 Lac)
Loan Amount
for
15
Year
Loan Tenure
at
9.00%
Rate of Interest
.
How to Reduce Interest/ Tenure?
Pay
0
1
2
3
4
5
Extra EMI every year.
𝒊
Increase EMI by
0
2
3
5
7
10
15
20
% every year.
𝒊
Pay Lump-Sum
0
(10 K)
(20 K)
(30 K)
(40 K)
(50 K)
(60 K)
(70 K)
(80 K)
(90 K)
(100 K)
in
0
1
2
3
4
5
6
7
year.
𝒊
Recalculate
Share
Loan
Tenure
Interest
Original
15 year
825680
Reduced
9 year
1 month
509498
Saved
5 year
11 months
316182
Loan Payment Schedule
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Original
Reduced
Balloon Payment
203 K
(2 Lac)
152 K
(1 Lac)
101 K
(1 Lac)
50 K
0
-
-
-
-
-
2024
2031
2038
You are here
-
Home
»
Home Loan
»
Reducing Balance
Percentage calculator
Fraction calculator
LCM HCF Calculator
Average Calculator
Trigonometry Calculator
Home Loan EMI by Reducing Balance
Home Loan EMI by Reducing Balance refers to a type of home loan where the Equated Monthly Installment (EMI) is calculated based on the outstanding principal balance, which decreases with each payment. This method, also known as the reducing balance method or diminishing balance method, offers flexible payments, reduced interest costs, and better control of your finances. Use our Home Loan EMI Calculator by Reducing Balance to plan your loan repayments and stay on top of your finances. Find accurate breakdowns of your payments, interest, and principal to plan your home loan better.
Calculate Home Loan EMI by Reducing Balance
Enter home loan details including loan amount, interest rate, tenure, and choose months or years for your home loan EMI by reducing balance.
Click Calculate to view your initial home loan EMI breakdown and calculate home loan EMI by reducing balance based on the inputs.
Customize home loan payment options with three inputs.
Select a number of extra EMIs per year for your home loan.
Increase home loan EMIs by a percentage.
Select a lump sum payment in a specific year for your home loan.
Adjust inputs as needed and click Recalculate to dynamically update your home loan tenure and interest while calculating your home loan EMI.
Reducing Balance EMI formula
To calculate Home Loan EMI, use the Reducing Balance EMI formula for precise results. This calculation helps you understand your repayment obligations clearly.
E
M
I
=
P
×
r
×
(
1
+
r
)
n
(
1
+
r
)
n
-
1
EMI
= Equated Monthly Installments
P
= Principal loan amount
r
= Monthly interest rate
n
= Number of monthly installments
Eligibility Criteria for Home Loan EMI by Reducing Balance
Stable Income:
Applicants should have a stable and verifiable source of income, either through salaried employment or self-employment, to demonstrate their ability to repay the home loan EMI by reducing balance.
Creditworthiness:
A good credit score is essential to qualify for a home loan EMI by reducing balance, reflecting a history of responsible credit behavior and repayment.
Employment Stability:
Lenders typically require applicants to have a consistent employment history, ensuring a reliable income stream to support home loan EMI repayments.
Property Compliance:
The property being financed through the home loan EMI must meet the lender's criteria, including clear title deeds, acceptable valuation, and compliance with local regulations.
Home Loan EMI Calculator by Reducing Balance FAQ
How does Flat Rate EMI differ from a Reducing Balance EMI?
Flat rate EMI calculates interest on the original principal amount throughout the loan term, resulting in fixed, equal monthly payments. In contrast, reducing balance EMI calculates interest on the outstanding principal, which decreases with each repayment, leading to gradually lower EMIs and typically lower overall interest costs.
How does the Reducing Balance EMI affect my total interest paid?
With reducing balance EMI, interest is calculated on the decreasing outstanding principal. As you make payments, the principal and interest decrease, leading to lower overall interest paid over the loan term.
What are the advantages of Reducing Balance EMI?
The reducing balance EMI method charges interest on the reducing principal, which lowers overall interest costs. It is fairer than flat-rate loans and allows for additional payments to further reduce interest.
×
How extra EMI(s) help?
At the end of the year, you can pay extra EMIs out of your savings. This extra EMI payment will go towards your Loan Amount and save you on the interest as well as tenure of the loan.
Payment
Tenure
Interest
Current
15 year
825680
1 Extra EMI/ year
13 year
▶ 2 year
697394
▶ 128286
2 Extra EMI/ year
12 year
▶ 3 year
606884
▶ 218796
3 Extra EMI/ year
11 year
▶ 4 year
539424
▶ 286256
How increasing EMI helps?
As your income increases each year, you can get your EMI increased from the bank. This allows you to allocate more funds towards paying off the loan amount and save you on the interest as well as tenure of the loan.
Payment
Tenure
Interest
Current
15 year
825680
Increase EMI by 1%
14 year
▶ 1 year
757695
▶ 67985
Increase EMI by 3%
12 year
▶ 3 year
664656
▶ 161024
Increase EMI by 5%
11 year
▶ 4 year
601871
▶ 223809
How Paying Lumpsum Amount helps?
If you receive unexpected income, such as a bonus or tax refund, consider making a lump-sum payment on your loan. This can help reduce the outstanding loan amount and save you on the interest as well as tenure of the loan.
Payment
Tenure
Interest
Current
15 year
825680
Pay 10% in 2nd year
13 year
▶ 2 year
636748
▶ 188932
Pay 20% in 3rd year
11 year
▶ 4 year
536628
▶ 289052
Pay 30% in 4th year
10 year
▶ 5 year
492108
▶ 333572
How to Reduce Interest/ Tenure?
Making early payments towards Principal amount can reduce your Interest and/ or Tenure.
1. How extra EMI(s) help?
At the end of the year, you can pay extra EMIs out of your savings. This extra EMI payment will go towards your Loan Amount and save you on the interest as well as tenure of the loan.
2. How increasing EMI helps?
As your income increases each year, you can get your EMI increased from the bank. This allows you to allocate more funds towards paying off the loan amount and save you on the interest as well as tenure of the loan.
3. How Paying Lumpsum Amount helps?
If you receive unexpected income, such as a bonus or tax refund, consider making a lump-sum payment on your loan. This can help reduce the outstanding loan amount and save you on the interest as well as tenure of the loan.
Let Others Know
✖
Facebook
Twitter
Reddit
LinkedIn
Email
WhatsApp
Copied!