Loan prepayment calculator
A prepayment goes straight to your principal, so every later EMI carries less interest. Enter a one-time amount, a yearly amount, or both, and compare the two choices your bank will offer: keep the EMI and finish sooner, or keep the tenure and pay a lower EMI.
By FinancePaisa Editorial Team · Research & editorialUpdated
₹
%
years
₹
₹
Paid after every 12th EMI. Leave at 0 for a one-time prepayment only.
Interest saved₹14,57,301
Loan ends earlier by3 yr 9 mo
Current EMI₹43,391
Total prepaid₹5,00,000
Interest without prepaying₹54.14 lakh
What this means
Reducing the tenure saves ₹14,57,301 in interest; reducing the EMI saves ₹4,77,894. Keeping the EMI and shortening the loan saves ₹9,79,407 more.
Worked example: ₹5 lakh extra on a ₹50 lakh loan
A ₹50 lakh home loan at 8.5% for 20 years has an EMI of ₹43,391. You prepay ₹5 lakh after two years.
If you keep the EMI, you save ₹14,57,301 in interest and the loan ends 3 yr 9 mo early.
If you keep the tenure instead, your EMI drops to ₹38,864 and you save ₹4,77,894. Shortening the tenure saves ₹9,79,407 more.
Timing matters more than amount
The same ₹5 lakh prepaid at different points of that 20-year loan:
| When you prepay ₹5 lakh | Interest saved | Loan ends earlier by |
|---|---|---|
| End of year 2 | ₹14,57,301 | 3 yr 9 mo |
| End of year 5 | ₹10,69,153 | 3 yr 0 mo |
| End of year 10 | ₹5,71,382 | 2 yr 0 mo |
| End of year 15 | ₹2,22,182 | 1 yr 4 mo |
End of year 2
- Interest saved
- ₹14,57,301
- Loan ends earlier by
- 3 yr 9 mo
End of year 5
- Interest saved
- ₹10,69,153
- Loan ends earlier by
- 3 yr 0 mo
End of year 10
- Interest saved
- ₹5,71,382
- Loan ends earlier by
- 2 yr 0 mo
End of year 15
- Interest saved
- ₹2,22,182
- Loan ends earlier by
- 1 yr 4 mo
Reduce EMI or reduce tenure?
- Reduce tenure if the current EMI is comfortable: it always saves more interest.
- Reduce EMI if you need monthly breathing room, for example after a job change or a second loan.
Before you prepay
- Keep six months of expenses as an emergency fund first.
- Clear higher-cost debt (credit cards, personal loans) before a home loan.
- Floating-rate loans to individuals carry no prepayment charge under RBI rules; fixed-rate loans may.
- Under the old tax regime, home-loan interest is deductible up to ₹2 lakh a year, which slightly lowers the effective saving.
Frequently asked questions
Is prepaying better than investing the money?
Prepaying earns a guaranteed return equal to your loan rate. Investing only wins if you expect a higher return after tax and are comfortable with the risk. Many borrowers split the difference.
How is the prepayment applied?
This calculator applies the prepayment right after that month’s EMI, straight to principal. Banks work the same way, though some apply it on the next EMI date.
Can I download the schedule?
Yes. The download gives every month’s principal, interest, prepayment and closing balance as a CSV file.
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