An Amortization Schedule is a detailed table that shows each loan payment over time, breaking every EMI into interest paid, principal repaid, and the remaining loan balance.
An amortization schedule helps borrowers clearly understand how a loan is repaid month by month. It lists every installment (EMI) from the first payment to the last and shows three key components for each period:
Interest portion
Principal portion
Outstanding loan balance
In the early years of a loan—especially long-term loans like home loans—a higher share of each EMI goes toward interest. As time passes, the interest component reduces and the principal repayment increases. This gradual shift is clearly visible in the amortization schedule.
Lenders provide an amortization schedule at the time of loan sanction or through online loan calculators. Borrowers use it to compare loan offers, understand total interest cost, and plan prepayments or part-payments, which can significantly reduce interest outgo.
"If you take a home loan of ₹20 lakh for 20 years, the amortization schedule will show that during the first few years most of your EMI pays interest. After several years, a larger portion of each EMI starts reducing the principal until the loan is fully repaid."