FinCalc

Prepayment Calculator

See how much you save by making extra loan payments

₹
%
Yrs
₹

Payment Frequency

Interest Saved

₹11,48,164

Time Saved

3y 8m

New Tenure

16y 4m

Original: 20 years

Monthly EMI

₹43,391

Stays the same

Outstanding Balance Over Time

What is a Prepayment Calculator?

Making extra payments toward your loan principal — beyond your regular EMI — is one of the most effective ways to save on interest and become debt-free faster. This calculator shows you exactly how much time and money you save by making prepayments, whether they're one-time lump sums or regular monthly/yearly additions.

The results can be dramatic. Even a modest annual prepayment of ₹1 lakh on a ₹50 lakh home loan can save you ₹8–12 lakh in interest and cut 3–5 years off your tenure. The calculator generates a revised amortization schedule so you can see the month-by-month impact.

When to Use This Calculator

  • Planning how to use a bonus or windfall — prepay loan vs invest
  • Seeing how much faster you can close your home loan with extra monthly payments
  • Comparing the impact of reducing EMI vs reducing tenure after a prepayment
  • Deciding how much to prepay when interest rates rise on a floating-rate loan
  • Calculating whether it's worth breaking a fixed deposit to prepay a loan

Key Terms

Part Prepayment

A lump-sum payment made toward the loan principal, over and above regular EMIs. Banks allow this without penalty on floating-rate home loans (per RBI guidelines).

Foreclosure

Paying off the entire remaining loan balance at once. Also called full prepayment. RBI mandates no foreclosure charges on floating-rate home loans.

Tenure Reduction

After a prepayment, keeping the same EMI but shortening the loan duration. This saves maximum interest compared to reducing EMI.

EMI Reduction

After a prepayment, keeping the same tenure but lowering the monthly EMI. This improves monthly cash flow but saves less total interest than tenure reduction.

Frequently Asked Questions

Is it better to reduce EMI or reduce tenure after prepayment?+
Reducing tenure saves more interest in the long run because you're paying off the loan faster and accumulating less interest. Reducing EMI gives you more monthly cash flow. If you can afford the current EMI, always choose tenure reduction.
Are there any charges for prepaying a home loan?+
RBI has mandated that banks cannot charge prepayment penalties on floating-rate home loans. For fixed-rate loans, banks may charge up to 2-3% of the prepaid amount. Check your loan agreement for specific terms.
When is the best time to make a prepayment?+
The earlier, the better. In the initial years of a loan, most of your EMI goes toward interest. A prepayment early on reduces the principal significantly, which reduces interest for all remaining years. A ₹5 lakh prepayment in year 2 saves far more than the same amount in year 15.
Should I prepay my loan or invest the money instead?+
Compare the loan interest rate (post-tax) with your expected investment return (post-tax). If your loan is at 8.5% and you can earn 12% post-tax in equity, investing may be better — but investments carry risk while prepayment gives guaranteed savings. Many people do a mix of both.