Amortisation schedule
| Month | Payment | Interest | Principal | Balance |
|---|
How the loan payment is calculated
Worked example
250,000 at 5.5% over 5 years: r = 0.004583, n = 60. EMI = 250,000 × 0.004583 × 1.3157 ÷ 0.3157 = 4,775.29 per month. Total repaid 286,517; total interest 36,517.
Frequently asked questions
How is the monthly loan payment (EMI) calculated?
EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1), where P is the principal, r the monthly interest rate (annual rate ÷ 12 ÷ 100) and n the number of monthly payments. For a 0% loan the payment is simply P ÷ n.
What is the difference between flat rate and reducing balance?
Reducing balance (used here and by most banks for mortgages and personal loans) charges interest only on the outstanding balance, so interest falls each month. A flat rate charges interest on the original principal for the whole term, which makes a 4% flat rate roughly equivalent to a 7.5% reducing rate. Always compare APRs.
What is an amortisation schedule?
A month-by-month table showing how each payment splits between interest and principal and the balance remaining. Early payments are mostly interest; later payments are mostly principal.
How much interest will I pay in total?
Total interest = (monthly payment × number of payments) − principal. The calculator shows this and the total amount repaid.
Does making extra payments reduce interest?
Yes. Any overpayment reduces the balance on which future interest is charged, shortening the term and cutting total interest. Use the extra monthly payment field to see the saving.
Is this calculator suitable for car loans, personal loans and mortgages?
Yes — any loan with equal monthly payments on a reducing balance. For UAE and GCC car loans, banks typically cap the term at 60 months and lend up to 80% of the car value.
Does it include fees or insurance?
No. Arrangement fees, processing fees (often 1% in the GCC) and life insurance are excluded. Add them to the principal if they are financed, or treat them as upfront costs.