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EMI in Advance vs Arrears Calculator

Paying at the start of the month against the end. Advance payments are lower because each one has an extra month to work, which is the annuity-due convention.

Also called: annuity due vs ordinary annuity loan.

₹
%
months
Payment in advance
₹21,071

₹21,071 paid at the start of each month against ₹21,247 at the end, a difference of ₹176 a month and ₹10,536 over the loan.

Payment in arrears
₹21,247
Monthly difference
₹176
Difference over the loan
₹10,536
Total interest, in advance
₹2,64,287
Total interest, in arrears
₹2,74,823
How this is calculated

An estimate, not an offer or a guarantee. Projected returns assume the rate you entered holds for the whole term, which no market does.

Method and background

This is what the calculation gives for the numbers you entered. It is an estimate, not advice, and it knows nothing about your situation beyond those numbers. Rules for India change on a published schedule; the effective date is shown on every rule-based tool.

How this is calculated

An advance payment is simply the arrears payment discounted by one period. The whole difference is one month of interest on each payment, so it grows with the rate and is invisible at a zero rate.

a payment made a period earlier is discounted by one period
i
Monthly rate (decimal)

Worked examples

Each of these is asserted on every build. If a change to the engine ever moved one of these answers, the build would fail before the page could print it.

ten percent over five years

Loan amount
₹10,00,000
Interest rate
10%
Tenure
60 months

Payment in advance₹21,071

The standard annuity payment, computed independently

Open this example

a zero rate makes the two identical

Loan amount
₹10,00,000
Interest rate
0%
Tenure
60 months

Payment in advance₹16,667

boundary: the only rate at which timing does not matter

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a single payment is the whole loan plus interest

Loan amount
₹10,00,000
Interest rate
10%
Tenure
1 months

Payment in advance₹10,00,000

degenerate case

Open this example

Method and limits

What it assumes

  • The same rate and tenure on both.

What it deliberately does not model

  • Some lenders quote advance payments but charge the first at disbursement, which changes the cash flow.

Formula version 1.0.0 · definition 1.0.0 · India · Report a problem with this calculator

Frequently asked questions

Which do lenders use?
Arrears is the norm for term loans. Advance appears in vehicle and equipment leases, and quoting one against the other without saying which makes a lender look cheaper than it is.