Original principal
Annual reducing balance rate
Repayment period in years
Monthly EMI
₹0
Total Interest
₹0
Total Payment
₹0
Year-wise Principal Repayment
| Year | Principal | Interest | Total Paid | Balance |
|---|
How Principal Repayment Works
In a reducing balance EMI loan, the principal portion of each EMI grows over time because the interest portion shrinks as the balance reduces. Here is what typically happens:
- First year: ~30–40% of EMI is principal (for a 5-year loan); lower for longer tenures
- Midpoint: ~50% of EMI is principal
- Last year: ~80–90% of EMI is principal
This is why banks prefer longer tenures — and why borrowers benefit from making prepayments early.
Frequently Asked Questions
How do I track my principal balance in real time?
Log into your bank's netbanking portal and go to the loan section. The current outstanding balance is the principal remaining. You can also download the repayment statement to see principal paid to date.
Does my principal stop reducing if I delay an EMI?
Yes. If an EMI is delayed, the extra interest accrued gets added to outstanding balance, effectively increasing your principal owed and extending your loan duration (or increasing future EMIs).