EMI = P × r × (1+r)^n / ((1+r)^n – 1), where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the total number of monthly instalments. For a ₹10L loan at 10% for 5 years: r = 0.00833, n = 60, EMI = ₹21,247.

Under Old Tax Regime only: Section 24(b) allows deduction of up to ₹2 lakh on home loan interest per year for self-occupied property. Section 80C allows deduction of up to ₹1.5 lakh on principal repayment as part of the overall 80C limit. These deductions are not available under the New Tax Regime.

Reducing tenure saves significantly more interest than reducing EMI. If your budget allows, always prefer tenure reduction. Example: On a ₹50L home loan at 8.5% with 15 years remaining, a ₹5L prepayment saves ₹8.2L in interest by reducing tenure vs ₹4.1L by reducing EMI.

Balance transfer makes financial sense when: the new interest rate is at least 0.5% lower, you have 10+ years of tenure remaining, and the processing fee (typically 0.5-1% of outstanding balance) is recovered within 18-24 months of interest savings. In the early years of a loan when interest component is highest, even a 0.25% rate reduction can save lakhs.