Loan Prepayment Calculator
Calculate exactly how much interest you save by prepaying your home loan or any loan. See tenure reduction, new EMI and why early prepayment saves 3x more than late prepayment.
Loan Prepayment Savings Calculator
Results update instantly
Enter your current outstanding loan balance
Enter your current loan interest rate
These numbers are a solid starting point. Your actual EMI may vary slightly by lender — always confirm before signing.
| Year | EMI Paid | Principal Paid | Interest Paid | Interest % | Balance |
|---|
On a ₹30L home loan at 8.5%, making one extra EMI per year (₹26,035 extra annually) reduces your 20-year loan to 17 years and saves ₹6.2L in interest. The earlier you prepay, the more you save — same amount prepaid in year 1 saves 3× more than year 10.
What is a Loan Prepayment Calculator?
A loan prepayment calculator shows exactly how much interest you save and how many years you cut from your loan tenure by making a lump sum payment towards your principal. Prepayment is the single most powerful tool for reducing your total loan cost — yet most borrowers never use it optimally because they don't know the exact savings involved.
Enter your current outstanding loan balance, interest rate, remaining tenure, the amount you want to prepay, and the month you plan to prepay. The calculator instantly shows interest saved, tenure reduction, and new EMI — giving you the data to make an informed decision.
Why prepayment timing matters enormously
In the early years of any loan, 60–70% of your EMI goes towards interest. This means prepaying in year 1–5 saves 3–4 times more interest than the same prepayment in year 10–15. This is the most important insight in personal finance that most borrowers discover too late.
New tenure = Months required to close loan at same EMI with reduced principal
RBI rules on prepayment
Floating rate home loans: RBI mandates zero prepayment penalty. You can prepay any amount at any time with no charges. This applies to all floating rate home loans from banks — the most common type in India.
Fixed rate loans: Prepayment penalty of 1–2% of the prepaid amount is allowed. Check your loan agreement before prepaying.
Personal loans and car loans: Most banks allow prepayment after 6–12 EMIs with a 2–5% penalty. Verify your specific loan terms.
Reduce EMI vs reduce tenure — which is better?
When you make a prepayment, you can ask your bank to either reduce your monthly EMI (keeping tenure same) or reduce your tenure (keeping EMI same). Reducing tenure is almost always better — it closes your loan faster and saves significantly more total interest. Reducing EMI only helps if your monthly cash flow is strained.
ThriftRupee tips for loan prepayment
Tip 1: Prepay every bonus and windfall. Tax refunds, performance bonuses, gift money — direct every unexpected inflow to loan prepayment before it gets spent. Even ₹20,000–₹50,000 annually compounds to massive interest savings over a 20-year loan.
Tip 2: One extra EMI per year. Paying one additional EMI annually (₹26,000 on a ₹30L loan) reduces a 20-year loan to approximately 17 years and saves over ₹6 lakh in interest.
Tip 3: Prepay vs invest. If your loan rate is 8.5% and you can earn 12%+ in equity mutual funds, investing mathematically wins. But prepayment offers a guaranteed, tax-free, risk-free return equal to your loan rate — which no FD or debt fund can match. For risk-averse borrowers or those under financial stress, prepayment first.