![]() ![]() When you estimate your Equated Monthly Installment (EMI) based on the loan amount, interest rate, and loan tenure, you can determine how affordable it is and plan your finances accordingly. ICICI Bank's EMI calculator is a useful tool that helps you plan and manage your Home Loan effectively. However, during the tenure of the loan, subsequent EMIs actually contribute more towards repaying the principal amount compared to earlier EMIs. It's well-established that initial EMIs primarily go towards paying interest due, rather than the principal amount. This means that with each EMI payment, the pattern of reduction in the principal balance typically follows a similar trend across all financial institutions. As a result, the EMI calculated and amortization schedule provided by different banks and non-banking financial companies (NBFCs) will generally be similar for a given loan amount, tenure, and interest rate. However, later EMIs do contribute more towards repaying the principal. Financial institutions typically calculate EMIs using a common mathematical formula. The first few EMIs primarily go towards paying interest and less towards repaying the principal. Over time, the proportion of each EMI used for repaying the principal and interest changes. Each EMI repayment covers part of the principal (or the amount borrowed) and the interest due on that outstanding principal.
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