Loan Prepayment Calculator

See exactly what an extra payment saves you — in interest and in years. Model a bit extra every month, a one-time lump sum, or both together.

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How to use this calculator

  1. Enter outstanding loan amount
  2. Enter interest rate
  3. Enter remaining tenure
  4. Enter extra paid every month (optional — leave it as it is if it does not apply)
  5. Enter one-time prepayment (optional — leave it as it is if it does not apply)
  6. Enter made after — When the one-time payment is made.
  7. Read the result — it updates as you type.

The formula used

Each month: Balance = Balance − (EMI + Extra − Interest)

Extra
Anything you pay above the EMI
Interest
Balance × monthly rate

Every extra rupee goes straight to principal, so the balance falls faster, so next month's interest is smaller — and that saving repeats every remaining month. The schedule is simulated month by month, including the one-time payment on the month you choose.

Worked example

A ₹25,00,000 loan at 8.5% for 20 years, paying ₹5,000 extra each month.

  • Normal EMI₹21,696
  • You pay₹26,696
  1. Without prepaying: 240 months, ₹27,06,939 interest
  2. With ₹5,000 extra: about 168 months, roughly ₹18.2 lakh interest

Roughly ₹8.8 lakh saved and six years off the loan, for an extra ₹5,000 a month you would probably not have missed.

Prepaying: a certain saving, not a forecast

Prepaying reduces the interest you are contractually obliged to pay, at exactly your loan's rate. On an 8.5% home loan, every rupee prepaid avoids 8.5% of interest a year — a certainty rather than a projection, and not taxed as income. That is an unusual combination, though it is a saving rather than an investment return.

Earlier is dramatically better

A prepayment in year two removes eighteen years of future interest on that amount. The same rupee in year eighteen removes almost nothing. If you are going to prepay at all, do it as early as you can.

Reduce the tenure, not the EMI

Banks usually offer both. Keeping the EMI and cutting the tenure saves far more interest. Reducing the EMI helps monthly cash flow but gives up most of the benefit.

Before you prepay, check

  • Charges. Floating-rate home loans to individuals generally cannot be charged a prepayment penalty in India, but fixed-rate loans and other loan types often can.
  • Your emergency fund. Money paid into a loan is hard to get back. Keep several months of expenses liquid first.
  • Costlier debt. Always clear credit card or personal loan debt before prepaying a cheap home loan.
  • Tax deductions. If you claim home loan interest deductions, prepaying reduces them slightly — usually still worth it, but worth checking.

Tips and common mistakes

Getting more out of it

  • Prepay as early in the loan as you can. The same amount saves far more in year two than in year fifteen.
  • Choose to shorten the tenure rather than reduce the EMI — it saves considerably more interest.

Mistakes to avoid

  • Prepaying before building an emergency fund. Money put into a loan is difficult to get back.
  • Prepaying a cheap home loan while carrying credit card or personal loan debt.
  • Assuming there is no penalty. Fixed-rate loans, car loans and personal loans often charge one.

Frequently asked questions

Should I prepay or invest the money instead?

Compare your loan rate with the return you would realistically need to earn after tax to do better. Prepaying an 8.5% loan avoids 8.5% with certainty; an equity investment might exceed that over long periods, but the outcome is unknown. Many people do some of both.

Is there a penalty for prepaying?

For floating-rate home loans taken by individuals, Indian rules generally prohibit foreclosure charges. Fixed-rate loans, car loans and personal loans often carry a penalty of 2–5% — check your agreement.

Should I reduce the EMI or the tenure?

The tenure, if you can afford the current EMI. It saves considerably more interest. This calculator models the tenure-reduction option.

Does a small extra amount really matter?

Yes, more than most people expect. Even ₹2,000–3,000 a month on a 20-year loan typically removes several lakh of interest and a few years of payments.

EMI Calculator

Monthly EMI, total interest and total repayment on a loan.

Loans Loan Amortization Calculator

Full month-by-month schedule of principal and interest.

Loans Loan Interest Calculator

Total interest you will pay over the life of a loan.

Loans FD Calculator

Maturity value of a fixed deposit with compounding.

Fixed Income Lump Sum Calculator

Growth of a one-time investment at an expected annual return.

Investment Compound Interest Calculator

Compound interest with yearly, quarterly or monthly compounding.

Investment
Disclaimer: These calculators are for educational and informational purposes only. Results are estimates based on the inputs provided and should not be considered financial, investment, tax, or legal advice.