Loan Prepayment Calculator

Calculate the interest saved by making a one-time, yearly or monthly prepayment on your loan, and choose between a shorter tenure or a lower EMI.

What is the Loan Prepayment Calculator?

A prepayment (part payment) reduces your outstanding principal ahead of schedule. Because interest is charged on the outstanding balance, every rupee prepaid early saves interest for the rest of the tenure.

How does it work?

The calculator builds two month-by-month schedules — with and without prepayment — and compares the total interest. You can keep the EMI and finish sooner (reduce tenure), or keep the tenure and lower the EMI.

Formula

Interest saved = Interest (original schedule) − Interest (schedule with prepayments)

Example

On a ₹50 lakh, 8.5%, 20-year loan, prepaying ₹5 lakh in month 12 and keeping the EMI saves about ₹16 lakh of interest and closes the loan 4 years earlier (192 months instead of 240).

Frequently asked questions

Reduce tenure or reduce EMI — which is better?

Reducing tenure saves more interest. Reducing EMI improves monthly cash flow. If the EMI is already comfortable, choose reduce tenure.

Are there prepayment charges?

RBI rules do not allow foreclosure or prepayment penalties on floating-rate loans to individuals. Fixed-rate loans may carry charges.

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