Loan Prepayment Calculator
Making even a single lump-sum prepayment on a home or car loan can save lakhs in interest. This calculator shows exactly how much you save by prepaying, whether you should use the savings to reduce your EMI or shorten the tenure, and how early you'll be debt-free.
Frequently Asked Questions
Is it better to reduce tenure or reduce EMI after prepayment?+
Reducing tenure is almost always better financially — you save more interest because the outstanding principal is paid off faster. Reducing EMI is preferable if you need to improve monthly cash flow (lower EMI frees up money for other investments or expenses).
When is the best time to make a prepayment?+
Early in the loan tenure. In the first few years, most of your EMI goes toward interest (not principal). A prepayment in year 1–5 saves significantly more interest than the same amount in year 15–20, because it reduces the principal base on which future interest is calculated.
Are there prepayment charges on home loans in India?+
For floating-rate home loans, RBI mandates that banks cannot charge prepayment penalties. For fixed-rate loans, banks may charge 2–4% of the prepaid amount. Check your loan agreement. For NBFC loans, charges may apply even on floating rates.
How much prepayment should I make?+
A useful rule of thumb: if your loan interest rate exceeds your investment return, prepaying is better. With a home loan at 8.5% and equity SIP returning 12%, investing wins. With a personal loan at 15%, prepayment is almost always better. The break-even is roughly when loan rate = expected investment return.