How to Read a Loan Amortization Schedule
Your repayment schedule shows where every rupee of your EMI goes. Learn to read it — and the three numbers in it that matter most.
Your loan amortization schedule is the most informative document your lender gives you, and the one most borrowers never read. It shows, month by month, where every rupee of your EMI goes. Once you can read it, you can see how much you really owe, when prepaying helps most, and how much a balance transfer could save.
Key takeaways
- Each EMI has two parts: interest on the outstanding balance, and principal repayment.
- On a ₹30 lakh, 9%, 20-year loan, about 83% of the first EMI is interest.
- After 5 years you will have paid over ₹16 lakh but still owe about ₹26.6 lakh.
The columns explained
- Month: the instalment number.
- Opening balance: what you owe at the start of the month.
- EMI: your fixed monthly payment.
- Interest: opening balance × monthly rate (annual rate ÷ 12).
- Principal: EMI − interest; this is what actually reduces the loan.
- Closing balance: opening balance − principal; it becomes next month’s opening balance.
A worked example: ₹30 lakh at 9% for 20 years
The EMI is ₹26,992. In month 1:
- Interest = ₹30,00,000 × 9% ÷ 12 = ₹22,500
- Principal = ₹26,992 − ₹22,500 = ₹4,492
- Closing balance = about ₹29,95,508
Only about one-sixth of the first EMI reduces your loan. That is not a trick by the lender — it is simply that interest is charged on a very large balance at the start.
Three numbers worth finding
1. The balance after a few years
After 5 years (60 EMIs) you will have paid about ₹16,19,507, of which about ₹12,80,718 was interest. The outstanding balance is still about ₹26,61,211. After 10 years — half the tenure — the balance is about ₹21,30,777, still over 70% of the original loan.
2. The crossover month
The point where the principal portion of the EMI becomes larger than the interest portion. In this example, it happens in month 149 — more than 12 years into the loan. Before the crossover, prepayments are especially powerful.
3. Interest paid each year
Yearly totals help with tax planning, since home loan interest and principal may qualify for deductions. See home loan tax benefits explained.
Using the schedule to make decisions
- Prepay early: a part payment made before the crossover month removes years of high interest. See reduce EMI or reduce tenure.
- Plan a foreclosure: the closing balance of any month shows roughly how much you would need to close the loan then.
- Judge a balance transfer: the interest left in the remaining schedule is the most you could save. See home loan balance transfer.
- Check your lender’s figures: compare your statement with a schedule you generate yourself.
Your lender’s schedule may differ slightly from a calculator’s because of the date your first EMI falls on (broken-period interest), rounding, or rate changes during the loan.
Generate your own schedule
The Loan Repayment Calculator builds the full schedule for any loan, grouped into yearly summaries you can expand month by month, with a CSV download. Add a part payment to see exactly how the rest of the schedule changes.
This article is for general information only and is not financial, tax or legal advice. Rates, rules and products change — check current terms with your lender or a qualified adviser. Disclaimer.