Shridha/ tools

Loan Prepayment Calculator

Enter your loan and an extra payment to see how much interest you save and how much sooner the loan ends. The calculation runs month by month, like a lender statement.

₹

₹50 lakh

% per year
years
Extra payment
₹

₹5 lakh

For example, 24 means after you have paid 23 EMIs.

After prepaying
years

Shows the extra monthly payment that gets you there, in the ideas below.

Interest saved₹14,57,301₹54,13,879 → ₹39,56,578
Loan ends16 yr 3 mo3 yr 9 mo earlier than 20 yr
EMI₹43,391unchanged

You pay ₹89,56,578 in total, including the extra payments. That is 26.9% less interest.

Ideas to finish sooner

Based on your loan above, ignoring the extra payment you chose. Each idea is worked out month by month.

  • To finish in 15 years, pay about ₹5,846 extra every month.

    That is on top of your EMI, from the first month.

  • Pay one extra EMI every year

    One additional EMI each year, from the end of the first year.

    Done in 16 yr 9 mo instead of 20 yr, saving about ₹10,29,139 in interest.

  • Add 10% to every EMI

    A small fixed top-up to each monthly payment, from the first month.

    Done in 16 yr instead of 20 yr, saving about ₹12,51,992 in interest.

  • Add 25% to every EMI

    A small fixed top-up to each monthly payment, from the first month.

    Done in 12 yr 6 mo instead of 20 yr, saving about ₹22,81,076 in interest.

  • Raise your EMI by 5% every year

    Matches a salary that grows, so the loan stays about as easy to pay.

    Done in 12 yr 3 mo instead of 20 yr, saving about ₹19,51,712 in interest.

  • Raise your EMI by 10% every year

    Matches a salary that grows, so the loan stays about as easy to pay.

    Done in 9 yr 8 mo instead of 20 yr, saving about ₹26,22,829 in interest.

Amounts are shown in rupees with Indian digit grouping. The maths works for any currency, so ignore the ₹ if you are using another one.

For planning, not for deciding. This tool gives estimates to help you plan and compare. It is not financial, tax, legal or medical advice, and it should not be the only thing you base a decision on. Check the numbers with your bank, lender, advisor or doctor before you act.

How it works

Enter your original loan amount, interest rate and tenure. The EMI is worked out from these.

Choose an extra payment: a one-time lump sum, an extra amount every month, or an extra amount every year. Then say from which EMI number it starts.

For a one-time payment, choose whether to keep the EMI and finish sooner, or lower the EMI and keep the tenure. Keeping the EMI saves much more interest.

The result shows the interest saved, the new end of the loan and the new EMI.

Below the result, “Ideas to finish sooner” tries common habits on your loan: one extra EMI a year, adding 10% or 25% to every EMI, or raising your EMI by 5% or 10% each year. Set a goal, such as finishing in 15 years, to see the extra monthly payment that gets you there.

The formula

Each month: interest = balance × (yearly rate ÷ 12), then the EMI pays that interest and the rest reduces the balance.

A prepayment reduces the balance directly. Because the next month’s interest is charged on a smaller balance, every later EMI repays more principal, and the loan ends sooner.

A worked example

A loan of ₹50,00,000 at 8.5% for 20 years has an EMI of ₹43,391. Prepaying ₹5,00,000 with EMI number 24 and keeping the EMI ends the loan in 195 months, 45 months early, and saves about ₹14,57,301 of interest. Lowering the EMI instead gives about ₹38,864 a month for the full 20 years and saves about ₹4,77,894.

Frequently asked questions

Is it better to shorten the tenure or lower the EMI?

Shortening the tenure saves much more interest, because you keep paying the same amount and the balance falls faster. Lowering the EMI helps your monthly cash flow but saves less.

Are there prepayment charges?

Banks cannot charge prepayment penalties on floating-rate home loans to individuals, but fixed-rate loans and some other loans may have charges. Check your loan agreement. This calculator does not include any fees.

Is prepaying better than investing the money?

It depends on your loan rate, the return you can expect after tax, and your comfort with risk. Prepaying gives a certain return equal to your loan rate. Compare it with what you could earn elsewhere.

Why does the earlier prepayment save more?

Interest is charged on the outstanding balance every month. A payment made early reduces the balance for more months, so it avoids more interest.

Related tools

Loan PlannerYour EMI, plus ways to repay sooner: an extra EMI a year, top-ups or a rising EMI.EMI CalculatorMonthly loan instalment, total interest and a year-by-year repayment table.SIP CalculatorEstimate the future value of a monthly SIP or a one-time lumpsum.