Question 1

How is EMI calculated on a home loan in India?

Accepted Answer

EMI = [P × R × (1+R)^N] / [(1+R)^N − 1], where P is the principal, R is the monthly interest rate (annual rate ÷ 12 ÷ 100), and N is the tenure in months. Indian banks use this reducing-balance formula.

Question 2

Which bank offers the lowest home loan interest rate in India?

Accepted Answer

Rates change monthly, but SBI, HDFC, ICICI, Axis, and PNB typically offer the most competitive floating rates (8.4%–9.5% p.a. as of 2026). Your final rate depends on credit score, loan amount, and employment profile.

Question 3

Does prepayment reduce my home loan EMI?

Accepted Answer

Prepayment reduces the outstanding principal. You can choose to keep the same EMI and shorten the tenure (saves more interest), or lower the EMI and keep the tenure. Floating-rate loans in India cannot charge prepayment penalties per RBI rules.