Know your loan numbers
before you borrow

Banks market loans by showing the lowest possible EMI which always means the longest tenure and maximum total interest. Always look at the full cost of the loan, not just the monthly instalment. A 5-year car loan costs dramatically less in total interest than a 7-year one at the same rate.

Banks cap total EMI obligations at 40–50% of your net monthly income (FOIR — Fixed Obligation to Income Ratio). If your take-home is ₹80,000 and existing EMIs are ₹15,000, your available EMI headroom is ₹25,000–₹25,000. The eligibility calculator uses this to show your exact borrowing ceiling.

Prepaying a home loan at 8.5% interest is equivalent to earning 8.5% guaranteed, post-tax (since home loan interest comes from post-tax income). This beats FDs, debt MFs, and any risk-free instrument. In the early years of a loan when interest makes up 85%+ of the EMI, prepayments are especially powerful.

A personal loan or NBFC loan quoted at 12% flat rate is actually ~21% on a reducing balance basis, nearly the double. This deceptive marketing is legal in India. Always convert any flat rate quote to its reducing balance equivalent using our calculator before comparing lenders.

At 3% monthly interest (36–42% p.a.), credit card revolving debt is the most expensive financial product available to retail consumers. A ₹50,000 balance on minimum payments can take 6+ years to clear and cost ₹80,000 in additional interest. Treat this like a financial emergency, pay it off before any investment decision.

The debt avalanche (pay highest-interest debt first while paying minimums on others) always minimises total interest paid compared to the snowball method. The snowball (pay smallest balance first) provides faster motivational wins but costs more overall. For high-interest credit card debt, the avalanche advantage can be ₹1–2L on a ₹5L total debt.