💰 Loan Interest Calculator 2026
Calculate total interest payable on your loan and see how different factors affect your interest cost. Get year-wise breakdown, EMI details, and compare scenarios for home loan, car loan, or personal loan.
Range: ₹1,00,000 - ₹1,00,00,000
Range: 5% - 20% p.a.
About Interest Calculation
This calculator uses the reducing balance method - interest is calculated on the outstanding principal each month. As you repay, principal decreases, so interest also decreases over time.
Total Interest Payable
₹ 2,74,772
Principal Amount
₹ 10,00,000
Total Payment
₹ 12,74,772
Monthly EMI
₹ 21,247
Principal vs Interest
Yearly Interest Breakdown
Compare Interest Scenarios
Current Scenario
Medium Interest₹ 2,74,772
Lower Rate (-1%)
Low Interest₹ 2,45,000
Higher Rate (+1%)
High Interest₹ 3,05,000
Shorter Tenure
Less Interest₹ 2,15,000
Longer Tenure
More Interest₹ 3,35,000
Best Case
Optimal₹ 2,15,000
Year-wise Interest & Principal Breakdown
| Year | Principal Paid (₹) | Interest Paid (₹) | Total Paid (₹) | Balance (₹) | Interest % |
|---|
First Year Interest
₹ 98,000
Last Year Interest
₹ 12,000
Total Interest
How to Reduce Your Loan Interest
Lower Rate
1% lower rate saves ₹30,000 on ₹10L loan
Shorter Tenure
1 year less saves ₹60,000 on ₹10L loan
Prepayment
₹1L prepayment saves ₹50,000 interest
Credit Score
750+ score gets best rates
Interest Calculation Formula
Reducing Balance Method:
EMI = P × r × (1+r)^n / ((1+r)^n - 1)
Where:
P = Principal Loan Amount
r = Monthly Interest Rate
n = Loan Tenure in Months
Loan Types & Interest
- Home Loan: 8.5% - 10.5% (Long tenure, tax benefits)
- Car Loan: 9% - 12% (3-7 years tenure)
- Personal Loan: 10% - 18% (Short tenure, no collateral)
- Education Loan: 8% - 13% (Moratorium period available)
❓ Frequently Asked Questions
How is loan interest calculated?
Most loans use the reducing balance method. Each month, interest is calculated on the outstanding principal. Formula: Interest for month = Outstanding Principal × Monthly Interest Rate. As you repay, principal decreases, so interest also decreases over time.
What is the difference between fixed and floating interest?
Fixed interest remains constant throughout the loan tenure. Floating interest changes based on market conditions. Fixed rates are usually 1-2% higher but provide certainty. Floating rates are lower but can increase.
How does tenure affect total interest?
Longer tenure means more interest because you pay interest for more years. Example: ₹10L loan at 10%: 3 years = ₹1.6L interest, 5 years = ₹2.7L interest, 7 years = ₹3.9L interest. Longer tenure saves EMI but costs more overall.
Can I prepay my loan to save interest?
Yes! Prepaying your loan reduces the outstanding principal, which directly reduces the total interest payable. Most banks allow prepayment with minimal charges. Use our loan prepayment calculator to see how much you can save.