Loan Prepayment Calculator

What Does This Calculator Show?

A prepayment (or part payment) is money you pay towards a loan on top of your EMIs. Because it goes straight to the principal, it stops interest from being charged on that amount for the rest of the loan. This calculator shows how much interest you save and, depending on your choice, how much sooner the loan ends or how much lower your EMI becomes.

How to Use It

1. Enter the outstanding loan, the interest rate and the years left.
2. Add a one-time prepayment and the month you plan to make it, an extra amount every month, or both.
3. Choose whether to keep the same EMI (finish sooner) or keep the same tenure (lower EMI).

Example

With ₹30 lakh outstanding at 8.5% for 15 years, the EMI is ₹29,542 and the interest still to pay is ₹23,17,594. A single prepayment of ₹3 lakh after 12 months, keeping the same EMI, cuts the interest to ₹17,32,642 - a saving of ₹5,84,952 - and the loan ends 2 years 5 months sooner. Every ₹1,000 prepaid saves about ₹1,950 of interest.

Reduce the EMI or the Tenure?

Keeping the EMI and shortening the tenure saves more interest, because the loan stops sooner. Lowering the EMI saves less but frees up monthly cash. If your budget is comfortable, reducing the tenure is usually the better choice; tell your bank which one you want when you make the payment.

When Prepaying Makes Sense

• Early in the loan, when most of each EMI is interest.
• When the loan rate is higher than what your savings can safely earn after tax.
• After you already have an emergency fund - money paid into a loan is hard to get back.

Limitations

The calculator assumes the rate stays the same. It does not include prepayment charges, which Indian lenders cannot levy on floating-rate loans to individuals but may charge on fixed-rate or business loans. Home loan interest also has tax benefits under the old regime that a prepayment may reduce. To see the original EMI and schedule, use the EMI Calculator.