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Personal Loan EMI Calculator by Reducing Balance
EMI
Reducing Balance
Flat Rate
Balloon Payment
Loan Amount
Loan Tenure
Year
Month
Rate of Interest
%
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Share
EMI
9013
Interest
148919
Principal
500000
Total
648919
148 K
(1 Lac)
6
Year
500,000
118 K
(1 Lac)
Year
Original
Reduced
𝒊
9013
will be
EMI
for
500000
(500 K)
Loan Amount
for
6
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
(5 K)
(10 K)
(15 K)
(20 K)
(25 K)
(30 K)
(35 K)
(40 K)
(45 K)
(50 K)
in
0
1
2
3
year.
𝒊
Recalculate
Share
Loan
Tenure
Interest
Original
6 year
148919
Reduced
4 year
9 months
118760
Saved
1 year
3 months
30159
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
149 K
(1 Lac)
111 K
(1 Lac)
74 K
37 K
0
-
-
-
-
-
2024
2027
2029
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Personal Loan EMI by Reducing Balance
A Personal Loan EMI by Reducing Balance calculates interest on the outstanding principal amount, which decreases as you make repayments. This results in gradually reducing EMIs over time, as interest is charged only on the remaining balance. This method typically results in lower overall interest costs compared to flat rate loans, since interest is charged on a progressively smaller principal. Calculate your personal loan EMI quickly with our Personal Loan EMI Calculator by Reducing Balance. Plan your monthly payments, interest, and principal with ease to meet your financial needs and stay on top of your finances.
Calculate Personal Loan EMI by Reducing Balance
Enter loan details like loan amount, interest rate, tenure, and choose months or years to calculate personal loan EMI by reducing balance.
Click Calculate to view your initial breakdown and calculate personal loan EMI by reducing balance based on the inputs.
Customize payment options with three inputs to calculate your personal loan EMI by reducing balance.
Select extra EMIs per year to reduce and calculate your personal loan EMI tenure.
Increase EMIs by a percentage to manage and calculate your personal loan EMI more effectively.
Select a lump sum payment to reduce interest and calculate your personal loan EMI.
Adjust inputs and click Recalculate to dynamically update your personal loan EMI tenure and interest.
Reducing Balance EMI formula
To calculate Personal 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 Personal 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 personal loan EMI.
Creditworthiness:
A good credit score is essential to qualify for this loan, reflecting a history of responsible credit behavior and repayment, particularly for personal loan EMI by reducing balance.
Employment Stability:
Lenders typically require applicants to have a consistent employment history, ensuring a reliable income stream to support personal loan EMI repayments.
Property Compliance:
The property being financed must meet the lender's criteria, including clear title deeds, acceptable valuation, and compliance with local regulations for a personal loan EMI.
Personal Loan EMI Calculator by Reducing Balance FAQ
How does Reducing Balance EMI differ from Flat Rate EMI?
Reducing balance EMI charges interest on the decreasing principal, leading to gradually lower payments and lower total interest. Flat Rate EMI charges interest on the full principal throughout the term, resulting in fixed payments and generally higher total interest costs.
What are the advantages of a Personal Loan EMI by Reducing Balance?
Personal loan EMI by reducing balance generally results in lower overall interest costs, as interest is recalculated on the decreasing principal balance. Borrowers may pay off their loans faster due to decreasing interest payments, and the transparent amortization schedule shows how each payment reduces both principal and interest.
What are the disadvantages of a Personal Loan EMI by Reducing Balance?
Personal loan EMI by reducing balance may have slightly higher initial payments compared to flat rate EMIs, as interest is calculated on the original loan amount. Although it offers cost savings, this method is more complex, requiring borrowers to understand how reducing interest rates affect their repayments.
×
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
6 year
148919
1 Extra EMI/ year
6 year
▶ 0 year
135750
▶ 13169
2 Extra EMI/ year
5 year
▶ 1 year
125255
▶ 23664
3 Extra EMI/ year
5 year
▶ 1 year
116299
▶ 32620
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
6 year
148919
Increase EMI by 1%
6 year
▶ 0 year
146015
▶ 2904
Increase EMI by 3%
6 year
▶ 0 year
140855
▶ 8064
Increase EMI by 5%
6 year
▶ 0 year
136382
▶ 12537
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
6 year
148919
Pay 10% in 2nd year
6 year
▶ 0 year
129145
▶ 19774
Pay 20% in 3rd year
5 year
▶ 1 year
124241
▶ 24678
Pay 30% in 4th year
5 year
▶ 1 year
131039
▶ 17880
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.
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