See exactly how much of each payment goes to principal vs. interest, year by year.
An amortisation schedule lists every instalment of a loan and splits each one into interest and principal, alongside the balance remaining. It is the same EMI you already know, taken apart. The value of seeing it laid out is that it makes the shape of the loan obvious in a way a single monthly figure never does: the early years barely touch the principal, and the balance falls slowly at first and then accelerates.
Two things become clear once you read a schedule properly. First, the crossover point — the instalment where principal finally exceeds interest — sits surprisingly late, often past the halfway mark on a long loan at a typical rate. Second, the schedule shows exactly what a prepayment does: it removes the tail of the loan rather than your next payment, which is why lenders ask whether you want a prepayment to shorten the tenure or reduce the EMI. Shortening the tenure saves considerably more interest; reducing the EMI improves monthly cash flow instead.
A ₹30 lakh home loan at 8.5% for 20 years has an EMI of about ₹26,035. In the first year you pay about ₹3.12 lakh in EMIs, but only about ₹59,700 of that reduces the loan. The other ₹2.53 lakh, roughly 81%, is interest. Over the full 20 years, total interest comes to about ₹32.5 lakh, more than the amount borrowed.
This is why early prepayments are so powerful. A lump sum paid in the first few years goes straight to reducing the principal and cuts many future interest payments.
Last reviewed: 5 November 2026 by the YogiCalc team · How we calculate and verify · Spotted an error? Tell us
It is the instalment where the principal portion first exceeds the interest portion. On a long loan at a typical rate it often falls past the midpoint of the term, which surprises most borrowers reading their schedule for the first time.
Reducing the tenure saves substantially more total interest, because you cut instalments off the end while the loan is still accruing interest. Reducing the EMI helps monthly cash flow but leaves the loan running as long as before.
Because most of each early instalment is interest rather than principal. The principal reduction in year one is genuinely small on a long-tenure loan. It is normal, not a sign of an error.
Yes. On a floating-rate loan a rate change alters everything after that point. Lenders typically hold the EMI constant and adjust the tenure instead, so the schedule extends or shortens rather than the payment changing.
At the crossover point, which on a 20-year loan at around 8 to 9% usually comes after about 11 to 12 years. Prepayments bring it forward.
Yes. Lenders provide a repayment schedule on request or in their app. Use it to check that your EMIs and balance match what you expect.