A ₹50 lakh loan taken for 25 years at a 12% interest rate results in a sizeable long‑term repayment obligation. An EMI calculator helps borrowers understand this commitment clearly before applying for a loan.
It allows users to estimate the EMI, total interest outgo, and total payable amount using simple inputs. This illustration explains how these numbers are derived and what they mean for borrowers evaluating long‑term credit.
The EMI calculation in this example is based entirely on predefined figures. The principal amount considered is ₹50,00,000, while the loan tenure is fixed at 25 years.
The assumed interest rate is 12% per annum and the repayment frequency is monthly. Using these inputs, the EMI calculator serves as a straightforward tool to understand the repayment burden over the full tenure.
With the assumptions provided, the EMI works out to ₹52,661 per month. Over the entire 25‑year tenure, the borrower repays a total of ₹1,57,98,362.
Out of this amount, ₹50,00,000 represents the principal and ₹1,07,98,362 accounts for the interest component. This demonstrates how long‑term loans significantly increase total payable amounts due to accumulated interest.
In the early years of repayment, a larger share of the EMI goes toward interest rather than principal. This is because outstanding loan balances are highest at the beginning of the tenure.
As the borrower continues making payments, the interest portion gradually declines and the principal component increases. This structure is typical for amortised loans such as home loans and long‑term personal loans.
The interest rate and loan tenure directly influence the total amount a borrower repays. A longer tenure lowers the monthly EMI but increases the total interest burden substantially.
A shorter tenure results in a higher EMI but reduces the ultimate interest outgo. Even small changes in interest rates, especially on long‑duration loans, can produce meaningful differences in total repayment.
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A ₹50 lakh loan taken for 25 years at a 12% annual interest rate results in an EMI of ₹52,661. The borrower repays a total of ₹1.57 crore, with interest forming a major part of the outgo.
This example shows the importance of understanding how interest accumulates over long periods. EMI calculators therefore play an essential role in helping borrowers make informed financial decisions.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: Jan 21, 2026, 5:47 PM IST
Akshay Shivalkar
Akshay Shivalkar is a financial content specialist who strategises and creates SEO-optimised content on the stock market, mutual funds, and other investment products. With experience in fintech and mutual funds, he simplifies complex financial concepts to help investors make informed decisions through his writing.
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