Loan Planner — Master Your Amortisation Schedule & Prepayment Strategy

A loan is a long-term commitment that most people sign without a full picture

The approval letter tells you the amount. The bank officer tells you the EMI. What nobody hands you is the full repayment schedule — month by month, for the next 10 or 20 years — showing exactly how much of each payment goes to the bank's profit versus reducing your debt.

A loan planner generates this schedule. It's not just about knowing the monthly payment; it's about understanding the architecture of the debt you're taking on.

The Anatomy of a Loan Payment

Every EMI is split between interest and principal. The proportion shifts every month:

In month 1 of a large home loan, you might be paying ৳22,000 in interest and only ৳6,500 toward the principal. In month 240, those numbers flip: ৳700 in interest and ৳27,800 toward principal.

This isn't because the bank is deceiving you — it's how fixed-payment amortisation works mathematically. The outstanding balance is highest at the beginning, so the interest charge is highest too. As the balance falls, the interest portion shrinks and the principal portion grows.

The practical consequence: if you prepay early, you're eliminating months from the highest-interest part of the schedule. If you prepay late, you're eliminating months from the lowest-interest part. Prepayment is most powerful in the first third of the loan tenure.

How to Use the Loan Planner on sadiqbd.com

1. Enter the loan amount — principal borrowed
2. Enter the annual interest rate
3. Enter the tenure — in months or years
4. Read the full amortisation schedule — month by month, showing EMI, interest portion, principal portion, and outstanding balance
5. Use the summary — total interest payable, total amount paid, and payoff date

Reading the Amortisation Table

A ৳15,00,000 loan at 9% for 15 years produces an EMI of approximately ৳15,227. Here's what the schedule looks like at key points:

Notice how in month 60 (year 5), you've made 60 payments totalling ৳9,13,620 — but the outstanding balance has only dropped from ৳15,00,000 to ৳13,48,946. You've paid off only ৳1,51,054 in principal while paying ৳7,62,566 in interest. The "equity" you've built in 5 years of a 15-year loan is just 10% of the property value.

Three Insights the Amortisation Schedule Reveals

1. The crossover point

The crossover point is when your monthly payment starts contributing more to principal than to interest. For a 15-year loan at 9%, this happens around month 100 — after more than 8 years. Before that point, most of your payment is interest.

This matters because: if you're selling or refinancing before the crossover point, you've paid a lot of interest and built relatively little equity.

2. The cost of extending tenure for a lower EMI

Banks sometimes suggest extending tenure to lower monthly payments. The loan planner shows the true cost:

₹20,00,000 at 9%:

• 10 years: EMI ৳25,334, total interest ৳10,40,080
• 15 years: EMI ৳20,276, total interest ৳16,49,680
• 20 years: EMI ৳17,999, total interest ৳23,19,760

Extending from 10 to 20 years saves ৳7,335/month but costs an additional ৳12,79,680 in interest. The lower EMI isn't free — it's a trade against total cost.

3. Prepayment value by timing

The loan planner lets you model prepayment impact. Making a ৳1,50,000 prepayment at month 12 of the above ৳15,00,000 loan effectively reduces the outstanding balance to ৳13,29,000. Recalculating at the same rate and remaining tenure shows months saved and interest avoided. Making the same prepayment at month 100 (near the crossover) saves dramatically less.

Real-World Planning Scenarios

Planning a home loan with a salary increment

A buyer takes a ৳30,00,000 home loan at 8.5% for 20 years. Current EMI: ৳26,036. She expects salary increments that will let her increase her payment each year.

The loan planner shows: if she increases her EMI by ৳3,000 annually (paying ৳29,036 in year 2, ৳32,036 in year 3, etc.), she would effectively reduce her tenure from 20 years to approximately 13–14 years, saving several lakh in interest.

Business loan cash flow mapping

A business owner borrows ৳5,00,000 at 12% for 3 years for equipment. Monthly EMI: ৳16,607. The amortisation table shows the interest and principal split every month, which the accountant needs for accurate financial statements — interest is expensed; principal repayment is a balance sheet movement.

Comparing two loan offers with different structures

Lender A: ৳12,00,000 at 10% for 5 years → total interest: ৳3,24,480 Lender B: ৳12,00,000 at 9.5% for 6 years → total interest: ৳3,66,120

Lender B has a lower rate but a longer tenure. The total interest is ৳41,640 more despite the lower rate. The loan planner makes both schedules immediately comparable.

Tips for Using the Loan Planner

Map repayments against income cycles. If your income is seasonal (bonuses in Q4, lower in Q1), align prepayment plans with your cash flow peaks — months where the planner shows large remaining balance and high interest portion are the best prepayment targets.

Request the amortisation schedule from your lender. Banks are required to provide this on request. Compare it against the loan planner's output — they should match. Discrepancies are worth investigating.

Recalculate after any rate change on floating-rate loans. When rates change, your EMI or tenure changes. The loan planner helps you understand the new schedule and plan accordingly.

Frequently Asked Questions

Does the loan planner work for all loan types? The amortisation mathematics is identical for home loans, car loans, personal loans, and business loans. Input the specific rate and tenure for each product.

How do I use the planner if I've already been repaying for some time? Enter the current outstanding balance as the principal and the remaining tenure. The planner generates the schedule from your current position.

What's the impact of making extra payments? Most loan structures allow you to make additional principal payments. After a prepayment, recalculate using the new outstanding balance as principal to see the revised schedule.

Is the loan planner free? Yes — completely free, no sign-up required.

The amortisation schedule transforms a loan from a monthly obligation into a navigable plan — one where you can see the costs clearly, identify the best moments for prepayment, and compare options on total cost rather than monthly payment alone.

Try the Loan Planner free at sadiqbd.com — generate the full repayment schedule for any loan and see exactly where your money goes.