How it works
The instalment is set so that the loan closes exactly at the end of the tenure. Interest each month is charged only on the balance still outstanding — the reducing-balance method — while the instalment itself stays the same.
Because the balance is highest at the start, early instalments are mostly interest. As the balance falls the interest portion shrinks and more of the same instalment goes to principal, which is why the balance curve is flat at first and steepens later.
More detail
Total interest is the sum of every month's interest charge, and the total payable is that plus the principal. Extending the tenure lowers the instalment but raises both — the scenario table below shows how much.
The rate is treated as fixed for the whole tenure. On a floating-rate loan the lender normally keeps the EMI unchanged and adjusts the tenure instead when rates move, so recheck the schedule after any rate reset.
To see what paying extra would save on this loan, use the prepayment calculator.
For a housing loan specifically, use the home loan EMI calculator.