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Principal & Interest Split
Result
Chart
Show formula & working
Principal in EMI k = EMI ÷ (1 + r)n − k + 1 (Excel PPMT)
Interest in EMI k = EMI − principal in EMI k (Excel IPMT)
r = annual rate ÷ 12 ÷ 100, n = total EMIs. Yearly figures add up the twelve EMIs in that loan year.Details
How this works
Every EMI is the same, but its make-up changes. In EMI 1 most of it is interest on the full loan; by the last EMI almost all of it is principal.
This is why prepaying early saves so much interest — and why tax certificates show large interest figures in the first years of a home loan.
Frequently asked questions
Why is the interest so high at the start?
Interest is charged on the balance you owe. At the start you owe the whole loan, so interest takes most of the EMI.
When does principal overtake interest?
It depends on the rate and tenure. For long loans at higher rates, it can take more than half the tenure. The yearly table shows the crossover point.
Why is my lender's figure slightly different?
Lenders may round the EMI, charge broken-period interest before the first EMI, or work out interest on a daily basis. Your repayment schedule from the lender is the final reference.
Talk to Rytvae
Compare lenders, structure the loan and plan prepayments with someone who reads sanction letters for a living.