Loan Prepayment Calculator

Put a lump sum against your loan and this calculator shows what it buys you. You get two outcomes side by side: keep the EMI and finish earlier, or keep the tenure and pay a smaller EMI.

Outstanding loan amount

₹

Principal still owed today, from your latest statement.

Current EMI

₹

Interest rate (per year)

Remaining tenure

Prepayment amount

₹

A single lump sum paid today, applied fully to principal.

Interest saved

₹2,67,633

Keeping the same EMI

Months saved

1 year 7 months

New tenure

8 years 8 months

Original tenure

10 years 3 months

Two ways to use the prepayment

Keep the EMI, finish earlier

EMI: ₹25,000
New tenure: 8 years 8 months
Interest paid: ₹7,98,130
Interest saved: ₹2,67,633

Keep the tenure, lower the EMI

New EMI: ₹22,802
Tenure: 10 years
Interest paid: ₹9,36,170
Interest saved: ₹1,29,593

Without the prepayment, the loan would run 10 years 3 months and cost ₹10,65,764 in interest at this EMI and rate.

Assumes a fixed rate for the remaining tenure and no prepayment charge.

What it is:: A calculator for what a lump-sum prepayment does to an existing loan.
What it calculates:: Revised tenure, interest saved, and the alternative of keeping the tenure and lowering the EMI.

Assumptions

The prepayment is made today, in one go, and goes entirely to principal.
The rate stays fixed for the remaining tenure.
No prepayment or foreclosure charge is included.

How it works

The prepayment is applied to the outstanding principal today, in one go. The calculator then reruns your existing EMI against the reduced balance until the loan clears.

Reducing the tenure saves more interest than reducing the EMI, because the balance falls faster. The trade-off is that your monthly outgo stays the same.

Assumptions: the rate stays fixed for the rest of the loan, the full prepayment goes to principal, and no prepayment charge is applied. Floating-rate home loans to individuals generally have no prepayment penalty, but fixed-rate and business loans often do.

Formula

New balance = outstanding - prepayment, then months to clear at the same EMI

outstanding: = principal still owed today
prepayment: = lump sum paid now, applied entirely to principal
EMI: = your current instalment, kept unchanged

Interest saved = interest without the prepayment minus interest after it.

Example calculation

A ₹20,00,000 balance at 9%, EMI ₹25,000, with a ₹2,00,000 prepayment

Tenure without prepaying: 10 years 3 months
Interest without prepaying: ₹10,65,764
Tenure after prepaying: 8 years 8 months
Interest after prepaying: ₹7,98,130
Interest saved: ₹2,67,633
Or: reduced EMI over the same tenure: ₹22,802

Frequently asked questions

Should I reduce the tenure or the EMI?

Reducing the tenure saves more interest. Reducing the EMI frees up monthly cash flow. If the EMI is comfortable today, cutting the tenure is usually the better value.

Will my bank charge me for prepaying?

For floating-rate home loans taken by individuals, lenders in India generally cannot levy a foreclosure charge. Fixed-rate loans, personal loans and business loans often do carry one. Ask your lender for the exact charge before you pay.

When is the best time to prepay?

As early as possible. Interest is charged on the outstanding balance, which is at its highest in the early years, so the same lump sum saves much more in year two than in year twelve.

Does this include a prepayment penalty?

No. If your lender charges one, subtract it from the interest saved to get the real benefit.