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Loan Prepayment Calculator

Use this Loan Prepayment Calculator to see the interest you'd save, and whether cutting your tenure or your EMI works out better. Adjust any input below and your results update instantly.

Your details

Adjust the inputs below and your results update instantly.

Outstanding loan balance (₹)*

≈ ₹20.00 L

The amount you still owe on your loan, before this prepayment.

₹1L₹2Cr

e.g. ₹20,00,000 outstanding

Interest rate (% p.a.)*

The interest rate on your existing loan.

6%18%

e.g. 9% on your loan

Remaining tenure (years)*

How many years are left on your loan before this prepayment.

130

e.g. 15 years remaining

Prepayment amount (₹)*

≈ ₹2.00 L

The lump sum you're paying toward your principal, on top of your regular EMIs.

₹10K₹50L

e.g. ₹2,00,000 lump sum

These are example numbers. Edit any input on the left to see your own.

Prepaying now saves you up to

₹4.78 L

by reducing your tenure

New principal

₹18.00 L

Time saved

2y 9mo

Two ways to use your prepayment

Both use the same ₹2.00 L prepayment, but reducing tenure always saves at least as much interest.

RECOMMENDED

Keep EMI, reduce tenure

Same ₹20,285/month, finish sooner

12y 3mo

New payoff time (2y 9mo sooner)

₹4.78 L interest saved

ALTERNATIVE

Keep tenure, reduce EMI

Same 15y, smaller monthly outgo

₹18,257/mo

Down from ₹20,285/mo

₹1.65 L interest saved

Outstanding balance: with vs. without prepayment

With prepaymentWithout prepayment

Shows Option A (reduce tenure). Notice the balance hits zero well before the original schedule.

Year-by-year comparison

Based on Option A, keeping your EMI unchanged.

YearBalance with prepaymentBalance without prepaymentStatus

2₹16.22 L₹18.62 L

10% repaid

10% of new principal repaid

4₹14.10 L₹16.96 L

22% repaid

22% of new principal repaid

6₹11.55 L₹14.98 L

36% repaid

36% of new principal repaid

8₹8.51 L₹12.61 L

53% repaid

53% of new principal repaid

10₹4.87 L₹9.77 L

73% repaid

73% of new principal repaid

12₹51,342₹6.38 L

97% repaid

97% of new principal repaid

14₹0₹2.32 L

Loan paid off

Fully repaid

15₹0₹0

Loan paid off

Fully repaid

Compare scenarios

See how a bigger prepayment moves your interest savings.

Your plan

₹2.00 L prepaid

₹4.78 L

Interest saved (Option A)

Baseline

Prepay +50%

₹3.00 L prepaid

₹6.63 L

Interest saved (Option A)

+₹1.85 L

Prepay 2x

₹4.00 L prepaid

₹8.20 L

Interest saved (Option A)

+₹3.42 L

Worked example: your loan prepayment numbers

A step-by-step walkthrough of how your prepayment turns into interest saved.

Step 1 · New principal

After a ₹2.00 L prepayment on your ₹20.00 L balance, you owe

₹18.00 L

Step 2 · Reduce tenure

Keeping your ₹20,285 EMI the same, your loan now finishes in

12y 3mo

Step 3 · Interest saved

Compared to your original schedule, that saves

₹4.78 L

✓

Prepaying ₹2.00 L saves ₹4.78 L by reducing your tenure, or ₹1.65 L if you'd rather keep your tenure and reduce your EMI instead.

Personalised insights

What your numbers reveal, and what changing them would do.

Prepaying ₹2.00 L now reduces your loan to ₹18.00 L

Your outstanding balance drops immediately from ₹20.00 L. How that reduction plays out depends on which option you choose below.

Keeping your EMI the same, you'd finish 2y 9mo sooner

That saves ₹4.78 L in interest, the larger of your two options, since it cuts off interest accrual for the months you skip entirely.

Keeping your tenure the same instead, your EMI would drop to ₹18,257

That saves ₹1.65 L in interest, less than Option A, since you're still paying for the full original 15 years.

Prepaying 2x instead would save ₹8.20 L

Doubling your prepayment to ₹4.00 L increases your interest savings from ₹4.78 L to ₹8.20 L.

How this is calculated

Every step of the math behind your result, shown in the open.

Your loan amount after prepayment

P = outstanding balance, X = prepayment amount, P' = new principal

Your prepayment (X) is subtracted directly from your outstanding balance (P); the reduction applies immediately, before any further interest accrues.

Example: ₹20.00 L − ₹2.00 L → ₹18.00 L new principal

Option A: solving for your new tenure

P' = new principal, r_m = monthly rate, EMI = your unchanged monthly instalment, n' = new number of months

Keeping your EMI fixed, this solves the EMI formula in reverse for the number of months (n') your smaller principal (P') now takes to repay.

Example: ₹18.00 L at ₹20,285/mo → 12y 3mo to repay (was 15y)

Option B: solving for your new EMI

P' = new principal, r_m = monthly rate, n = original remaining months, EMI' = new monthly instalment

Keeping your original tenure (n), this applies the standard EMI formula to your reduced principal (P') to find the smaller instalment (EMI') it now supports.

Example: ₹18.00 L over 15y at 0.750%/month → ₹18,257 new EMI

Assumptions

The prepayment is applied as a single lump sum, immediately, before any further interest accrues.
The interest rate stays fixed for the entire remaining tenure under both options.
No prepayment processing fees or penalties are included.
Figures are indicative and pre-tax, not financial advice.

Understanding loan prepayment

The concept, the motivation, and what to watch out for.

What happens when you prepay a loan?

A prepayment is a lump sum you pay toward your principal, on top of your regular EMIs. It immediately reduces what you owe, but you get to choose how that reduction plays out.

You can keep your EMI the same and finish the loan sooner (reducing tenure), or keep your original tenure and pay a smaller EMI from then on (reducing EMI). The two options use the same prepayment but save very different amounts of interest.

Reducing tenure almost always saves more

Finishing your loan sooner, rather than just lowering your monthly payment, cuts off interest accrual entirely for the months you skip: the larger saving of the two options.

It's the same EMI math, solved for a different variable

Reducing tenure inverts the EMI formula to solve for months; reducing EMI applies the standard formula to a smaller principal over the same months.

Compare the loan rate to what you'd otherwise earn

Prepaying only wins financially if your loan's interest rate is higher than the after-tax return you'd realistically get by investing that money instead. At today's lower home loan rates, that comparison isn't always obvious.

Did you know?

A few facts behind prepaying a loan.

A > B

Reducing tenure beats reducing EMI, almost always

For the same prepayment amount, finishing your loan sooner saves more total interest than simply paying a smaller EMI for the same remaining years.

Early

Prepaying early in the loan saves the most

A prepayment made in year 2 of a 20-year loan saves far more interest than the same prepayment made in year 18, since it removes interest-bearing balance for many more years.

RBI

Floating-rate loans usually carry no prepayment penalty

RBI rules generally prevent lenders from charging individual borrowers a penalty for prepaying or foreclosing a floating-rate loan.

Habit

Small, regular prepayments add up

You don't need one large lump sum: consistently prepaying smaller amounts whenever you can compounds into substantial interest savings over a loan's lifetime.

Frequently asked questions

Straight answers to the questions we hear most about prepayment.

What's the difference between reducing tenure and reducing EMI?

Reducing tenure keeps your EMI the same but finishes the loan sooner. Reducing EMI keeps your original payoff date but lowers your monthly payment from now on. Both use the same prepayment amount.

Which loan prepayment option saves more interest?

Reducing tenure almost always saves more total interest, since it cuts off interest accrual for the months you skip entirely, rather than just lowering the rate at which it accrues each month.

Are there loan prepayment penalties I should know about?

For individual borrowers, RBI rules generally prohibit loan prepayment penalties on floating-rate loans. Fixed-rate loans and some other loan types may still carry a penalty; check your loan agreement.

Can I use this as a loan prepayment calculator for any loan type?

Yes. This is a general loan prepayment calculator — also useful as a home loan prepayment calculator, an EMI prepayment calculator, or a prepayment calculator personal loan borrowers can use just as easily, and it works as a home loan EMI prepayment calculator too, since it's the same underlying EMI math regardless of which loan it's applied to. Enter your own outstanding balance, rate, and tenure from any loan and the reduce-tenure-vs-reduce-EMI comparison applies identically.

Can I make multiple prepayments over time instead of one lump sum?

Yes, and many borrowers do. This calculator models a single lump-sum prepayment; making smaller, regular prepayments would compound similarly, just spread across multiple recalculations.

Does this include any prepayment processing fees?

No, this calculator estimates only the interest impact of the prepayment itself. Some lenders charge a small processing fee for prepayments, so it's worth checking with your lender.

Is this financial advice?

No. This tool provides indicative estimates based on your assumptions. Consult your lender or a certified financial advisor before making borrowing decisions.