The instalment is the easy part. The number worth looking at is how much of it is interest — and how quickly that changes if you pay a little extra each month.
Same instalment every month, but the split moves: early years are mostly interest, later years mostly principal. Hover, or focus the chart and use the arrow keys.
P · i · (1+i)ⁿ / ((1+i)ⁿ − 1), where i is the annual rate divided by twelve and n is the tenure in months. Interest each month is charged on the balance still outstanding, so it falls as the loan runs down.An illustration, not a loan offer or financial advice. Your lender's figure may differ by a small amount depending on day-count and rounding conventions. Nothing you type is sent anywhere — the whole thing runs in your browser.
Because of the term, more than the rate. On a long loan at a typical home-loan rate, total interest can approach or exceed the amount borrowed. Drag the tenure slider down and watch two things move in opposite directions: the instalment goes up, the total interest falls sharply. The shortest term you can comfortably service is almost always the cheapest loan.
It buys breathing room, and it costs real money. A longer term lowers the monthly outflow but raises the total paid, sometimes dramatically. A reasonable middle path is to take the longer tenure for safety and then prepay whatever you can each month — open the Prepayment section above and see what even a modest extra amount does to the term.
Compare the loan rate against the return you would realistically earn after tax on the alternative. Prepaying gives you a guaranteed, risk-free saving equal to your loan rate; an investment has to beat that after tax and after risk to win. Where interest is tax-deductible, use the effective post-relief rate in the comparison.
You can test the investing side on the SIP calculator.
Yes. Zinfai records liabilities alongside your assets, so the net worth it shows is a true one — what you own minus what you owe. Loan balances also feed the FIRE engine, since debts you are still servicing change the corpus you need. See how tracking works.