Fixed Principal Loan Calculator

What Is a Fixed Principal EMI?

In a Fixed Principal EMI loan structure:

• You repay a fixed amount of the principal every month.
• Interest is charged only on the outstanding (remaining) principal.
• As the outstanding balance shrinks, the interest amount drops month by month.
• This leads to declining monthly payments, a big contrast to traditional EMIs where you pay a fixed amount every month.

When Is This Useful?

Fixed Principal EMI is not for every loan, but it shines in specific real-world scenarios:

• Business Loans: Many small business loans are repaid with a fixed principal structure. It helps the borrower clear the debt faster while giving lenders more visibility.
• Construction & Project Financing: Real estate developers and contractors often use this method to repay in manageable blocks while the project progresses.
• Informal or Co-operative Loans: In communities or small towns, co-operative societies and money lenders often prefer this simple model, ₹X principal + interest each month, no fuss.
• Equipment or Asset Financing: Short-term loans to purchase vehicles or machinery can benefit from this model... especially when income is expected to increase monthly.

How to Use the Fixed Principal Loan Calculator

• Enter the Loan Amount

  • Input the total amount you are borrowing in the “Loan Amount” field.

  • Example: 1200000 (₹12 lakhs)

• Provide the Interest Rate

  • Enter the annual rate of interest (in percentage) in the “Rate of Interest (%)” field.

  • Example: 11.5

• Set the Monthly Principal Payment

  • Specify how much of the principal you plan to repay each month in the “Monthly Principal Payment” field.

  • Example: 25000

• (Optional) Expand Advanced Options

  • Click the checkbox labeled “Advanced Options” if you want to enter a custom loan Tenure (In Months).

  • This option is useful if you want to model a balloon payment scenario, where the final month pays off the remaining principal.

• Enter the Tenure (Optional)

  • Under “Tenure (In Months)”, enter the total number of months you want to spread the loan over.

  • If provided, the calculator will apply the monthly principal for all months except the last, where the remaining balance will be paid in full.

  • Example: 5

• Click on “Calculate Now”

  • Hit the “Calculate Now” button to generate your amortization schedule.

  • The calculator will show:

    • Monthly EMI breakdown

    • Interest paid each month

    • Remaining balance

    • Final balloon payment (if tenure is set)

The Fixed Principal Loan Calculator is a powerful tool to help you plan your loan repayments smarter. By choosing a fixed principal strategy, you can reduce your interest burden over time and close your loan faster. Use this calculator to explore different repayment scenarios, stay informed, and make confident financial decisions.