Reducing Balance Calculator - Loan Math for Asia, Europe, Americas

Calculate your exact monthly payment with start dates & extra payments. See how much interest vs principal you pay each month. Export to PDF and CSV.

How Reducing Balance EMI Works

Unlike flat-rate loans, a reducing balance loan calculates interest on the outstanding principal each month. As you pay down the principal, your interest portion decreases and principal portion increases. This calculator uses the monthly reducing-balance method common across Asia, Europe, the Americas, and the Caribbean.

Formula: EMI = P × r × (1 + r)^n / ((1 + r)^n - 1) where P = Principal, r = Monthly Rate, n = Months

Extra Payments: Adding extra to your monthly payment reduces total interest and shortens loan term. Every dollar extra goes 100% to principal.