Loan Prepayment Calculator
Paying even a small amount above your EMI attacks the principal directly. This shows exactly how much interest that saves and how much sooner your loan closes.
Current EMI
₹26,035
+ ₹5,000 extra
Interest saved
₹11,73,056
Loan closes early by
6 years 4 months
| Without prepayment | With prepayment | |
|---|---|---|
| Monthly outgo | ₹26,035 | ₹31,035 |
| Time to close | 20 years | 13 years 8 months |
| Total interest | ₹32,48,327 | ₹20,75,271 |
| Total repaid | ₹62,48,327 | ₹50,75,271 |
Paying ₹5,000 extra every month saves ₹11,73,056 in interest and closes the loan 6 years 4 months sooner.
Assumes the extra amount is added to every EMI and the tenure shortens while the EMI stays the same. Some lenders charge a prepayment fee on fixed-rate loans; floating-rate home loans to individuals cannot.
Frequently Asked Questions
Why does a small extra payment save so much?
Because every extra rupee goes straight to principal, and you never pay interest on that rupee again for the remaining tenure. Early in a home loan almost all of your EMI is interest, so prepayments made in the first few years have the largest effect.
Should I reduce the EMI or the tenure?
Reducing the tenure saves far more interest, because you close the loan sooner. Reducing the EMI improves monthly cash flow but stretches the loan out. This calculator assumes the tenure shortens.
Can my bank charge a prepayment penalty?
Not on floating-rate home loans given to individuals — the RBI prohibits it. Fixed-rate loans and loans to companies can carry a charge, typically 2 to 4% of the amount prepaid, so check your sanction letter.
Is prepaying better than investing the money?
Compare the loan rate against the return you would earn after tax. Prepaying an 8.5% loan is a guaranteed, risk-free 8.5% return. If you are in the old regime and claiming interest deduction under Section 24, your effective loan rate is lower, which tilts the maths towards investing.