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Methodology

How every figure on this site is calculated

You are being asked to make a decision about a large amount of money using a number from a website. Here is exactly how that number is produced, what we chose to do differently from a lender and why, and what this tool cannot tell you.

Last reviewed 2026-09-03. If the engine changes, this page changes with it.

The engine, in six steps

This is the whole calculation. Every schedule on the site — with a plan, without one, under either strategy — comes out of this one loop.

  1. 01

    The periodic rate

    Your annual rate is converted to a rate per payment period as i = (1 + annual ÷ CP)^(CP ÷ p) − 1, where CP is the compounding periods per year and p the payments per year. On the defaults — monthly payments, monthly compounding — this collapses to annual ÷ 12, which is standard Indian monthly reducing balance. The general form matters only when you change the payment frequency: it holds the effective annual rate constant, so switching to fortnightly payments does not silently change the cost of your credit. A naive annual ÷ p would.

  2. 02

    The instalment

    The EMI is the standard annuity payment — the level amount that clears your balance over the remaining periods at that periodic rate. The period count is always a whole number derived from years and months; we never carry a fractional tenure. If you enter your own EMI, your figure overrides the computed one and the entire schedule is rebuilt around it.

  3. 03

    Interest, then principal

    For each period: interest is the opening balance times the periodic rate. Principal is the instalment minus that interest, plus any prepayment falling in the period. The closing balance is the opening balance minus the principal, and it becomes the next period's opening balance. There is nothing else in the loop.

  4. 04

    Nothing ever overpays

    No period pays more than the balance plus that period's interest, and prepayments are clamped to the same ceiling. This is why a schedule settles at exactly zero rather than overshooting into a negative balance, and why the final instalment is smaller than the rest.

  5. 05

    Rounding, at four points only

    Interest, the instalment, the principal and the closing balance are each rounded to two decimals, every period. Nowhere else. This is deliberate rather than sloppy: carrying more precision would leave fractions of a paisa at the end and would diverge from what your bank statement actually shows. Per-period rounding is what makes the schedule terminate cleanly.

  6. 06

    Every total is read from the rows

    Total interest, total prepaid, the payoff date and the time saved are all read off the schedule you can see. Nothing on the page is computed a second, independent way — so a headline figure and the table beneath it can never disagree.

Where we differ from a lender, and why

A calculator has to make choices that a specific loan agreement makes for you. These are ours. Each one is stated so you can judge whether it fits your loan — and each is set to understate rather than flatter, so a surprise is more likely to be a pleasant one.

A prepayment takes effect from your next scheduled payment
When you set a date, we apply the prepayment at the first scheduled instalment on or after it, not on the day itself. This is the conservative assumption. Lenders who credit a prepayment on the day it is received will save you slightly more than we show — at most one period of interest on the amount prepaid. We would rather understate a saving than overstate one.
Both futures run on the same rate path
The comparison figure — what you save — is the difference between two complete schedules built by the same engine: one with your plan, one without it, both on the identical sequence of rate changes. Comparing a prepayment plan against a baseline built on different assumptions is the most common way this category produces flattering numbers.
Interest accrues per payment period, not daily
Many lenders now accrue on a daily balance. Per-period accrual is the simpler and more widely applicable model, and on a monthly loan the difference is small — but it is a real difference and it runs in your favour, not ours. If your lender accrues daily, treat our figure as a floor.
A rate change re-amortises over the tenure remaining, by default
When your rate moves, we recompute the instalment so the loan still ends on the original date. Many Indian lenders do the opposite on a floating-rate loan — they hold the EMI and quietly extend the tenure. You can switch to that behaviour under Advanced options. If holding the EMI would stop it covering the interest, we raise the instalment anyway and say so on the page, because the alternative is a growing balance.
An annual prepayment means the same calendar month each year
Not a rolling twelve payments. If you set an annual prepayment for March, it lands every March, which is how a bonus or a tax refund actually behaves.
Tax relief is kept separate from fees
When you switch on tax modelling, forgone relief is reported alongside the net benefit rather than blended into it. A fee is money leaving your pocket; relief you no longer claim is a reduction in the benefit. They are different things and combining them into one number makes it impossible to explain.

What this tool cannot tell you

Every calculator has a boundary. Ours is here, stated plainly, because a tool that never admits a limit is asking to be trusted further than it should be.

  • It does not know your lender's exact conventions — day-count, rounding, or the day of the month they post a payment. Reconcile against your own statement before acting on a figure.
  • It models the loan, not your life. It has no view on your emergency fund, your other debt, your job security or your tax position, all of which can matter more than the interest arithmetic.
  • Prepayment charges, processing fees and tax rates are values you enter. We do not maintain a database of lender charges, because we could not keep one accurate, and a stale figure presented confidently is worse than an empty field.
  • It assumes you keep making the scheduled payments. It does not model missed payments, moratoria, restructuring or default.
  • It is not financial advice, and it is not a substitute for your loan agreement, which is the document that actually governs your loan.

How to check us

Take any month from your own statement. Multiply the opening balance by your annual rate divided by twelve. That is the interest we would charge for that period, to the rupee. The rest of the instalment is principal. If our schedule and your statement disagree by more than a rounding difference, the cause is almost always one of three things: the balance you entered is not the balance outstanding, your tenure is being counted from disbursement rather than from today, or a rate change happened on a date you have not recorded.

Found something that looks wrong? Tell us at [email protected]. A reproducible disagreement with a bank statement is the single most useful thing anyone can send us.