Loan Prepayment Calculator
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Quick Summary
- See exactly how much interest and how many months you save by prepaying your home, car or personal loan. Get your new payoff timeline. Free tool.
- For example, ₹30 lakh loan, 8.5%, 20 years, ₹2 lakh one-time prepayment in year 3 works out to Saves several lakh in interest, shortens tenure.
- Built for existing home, car or personal loan borrowers deciding whether prepayment is worth it
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Loan Details
Regular Monthly EMI
₹0Interest You Save
New Payoff Time
0 yrs
Loan Ends
—
Interest Without Prepayment
₹0
Interest With Prepayment
₹0
Prepay early for maximum benefit
Prepayments made in the early years of a loan save far more interest than the same amount paid later — most of your early EMIs go toward interest, not principal. Check with your lender for any prepayment charges (typically none on floating-rate home loans in India).
How the Loan Prepayment Calculator Works
You enter your existing loan details plus a one-time or recurring extra payment. The calculator re-runs the amortization schedule with that prepayment applied entirely to principal, and shows exactly how much interest you save and how many months earlier the loan closes.
Example Scenarios
| Scenario | Result |
|---|---|
| ₹30 lakh loan, 8.5%, 20 years, ₹2 lakh one-time prepayment in year 3 | Saves several lakh in interest, shortens tenure |
| ₹20 lakh loan, ₹5,000 extra every month from year 1 | Larger interest savings from prepaying earlier |
| ₹10 lakh loan, one-time ₹1 lakh prepayment near the end | Minimal interest saved — timing matters |
* Illustrative estimates assuming constant annual returns. Actual results vary with market conditions.
Frequently Asked Questions
Yes — every rupee of prepayment goes entirely toward reducing your principal, so you stop paying interest on that amount for the rest of the loan term. The earlier in the loan you prepay, the more interest you save, since a larger share of your EMI in the early years goes toward interest rather than principal.
RBI regulations prohibit banks and NBFCs from charging prepayment penalties on floating-rate home loans taken by individual borrowers. Fixed-rate loans and some other loan types may still carry prepayment charges — always check your loan agreement.
Compare your loan's interest rate to your expected investment return. If your loan rate is higher than what you can reliably earn after tax, prepayment usually wins since it's a guaranteed, risk-free return equal to your interest rate. If your investments can reliably beat the loan rate, investing may build more wealth — but prepayment also has psychological value in reducing debt stress.
Common Mistakes to Avoid
- Assuming there's always a prepayment penalty — RBI bans this on floating-rate individual home loans.
- Prepaying very late in the loan tenure, when most of the EMI is already going toward principal anyway.
- Prepaying instead of building an emergency fund first, leaving no buffer for unexpected expenses.
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* Calculations assume constant annual returns. Actual mutual fund returns vary. Past performance is not indicative of future results. FD comparison uses 7% p.a. SIP returns are compounded monthly.
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