Small EMI, Big Cost? ₹15 Lakh Loan Compared Over 25 vs. 15 Years

Taking out a home, personal, or education loan often involves a tempting choice: lower EMIs over a longer tenure. While a smaller monthly outgo seems more affordable, the real question is—what does it cost you in the long run?

Here, we use an EMI calculator to compare the total repayment and interest burden of a ₹15 lakh loan at 9% annual interest over 15 and 25 years. The difference may surprise you.

Scenario 1: ₹15 Lakh Loan at 9% for 15 Years

• Monthly EMI: ₹15,214 approx.
• Total repayment: ₹2,738,520
• Total interest paid: ₹12,38,852

A 15-year tenure means higher EMIs, but you save substantially on interest. This option suits borrowers who can afford slightly higher EMIs now to become debt-free faster and reduce total borrowing cost.

Suitable for: Those with stable incomes who want to cut down on long-term interest and repay faster.

Scenario 2: ₹15 Lakh Loan at 9% for 25 Years

• Monthly EMI: ₹12,588 approx.
• Total repayment: ₹3,776,384
• Total interest paid: ₹22,76,384

A 25-year plan lowers your monthly EMI by over ₹2,626 but results in an additional interest outgo of ₹10.37 lakh compared to the 15-year option. That’s the hidden cost of "affordable" EMIs.

Suitable for: Those prioritising short-term affordability or facing uncertain income flow, but willing to bear higher total costs.

What Should You Consider Before Opting for an EMI Tenure?

When comparing loan tenures, look beyond the EMI:

• Are you comfortable paying more interest in the long term for short-term ease?
• Is your income likely to rise soon, allowing for faster prepayment?
• Do you plan to refinance or switch loans later, which could affect total cost?
• Are you accounting for inflation and the opportunity cost of money?

Using an EMI calculator to visualise both monthly obligations and lifetime costs helps ensure your loan supports, not sabotages, your financial goals.

Read More: ₹20 Lakh Education Loan: 10-Year vs. 15-Year EMI Compared – How Does it Impact Your Early Career Finances?

Conclusion

A longer loan tenure might make EMIs seem manageable, but it comes at the cost of significantly higher total interest. A 15-year loan, while demanding monthly, saves you lakhs in the long term. One should choose a repayment plan by factoring in income stability, long-term goals, and debt tolerance.

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.