A ₹30 lakh loan over 30 years has a very light EMI of ₹23,067, but you end up paying ₹53.04 L in interest — well over half as much again as the principal.
The low EMI makes this tempting for first jobs and tight budgets: net income near ₹57,669 a month is enough to qualify. But compare the interest across tenures on the same ₹30 lakh — 30 years costs ₹53.04 L, while 20 years costs ₹32.48 L and 15 years just ₹23.18 L. Because the loan is small, even a modest income rise lets you prepay aggressively; doing so on a 30-year schedule captures most of the flexibility benefit while clawing back much of that extra interest.
| ₹30 L over 30 years | ₹23,067 / mo |
| Total interest, 30 yrs | ₹53,04,266 |
| Over 20 yrs (interest) | ₹32,48,327 |
| Over 15 yrs (interest) | ₹23,17,594 |
| Total repaid, 30 yrs | ₹83,04,266 |
Your EMI is fixed by the formula EMI = P × r × (1+r)n ÷ [(1+r)n − 1], where P is the loan principal, r is the monthly interest rate (annual rate ÷ 12) and n is the number of monthly instalments. Each EMI is split between interest and principal repayment: the early years are mostly interest, the later years mostly principal. A longer tenure lowers the EMI but raises the total interest you pay, because the principal is outstanding for longer.