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
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