Home Loan · Free Tool

Home Loan Prepayment Calculator

See how a lump-sum or yearly part-payment cuts your interest bill, and whether to reduce EMI or tenure.

Loan & Prepayment

Years of EMIs paid before the prepayment.

After prepaying, reduce

Interest Saved

₹13.2 L

Tenure Reduced By

3 yrs 5 mo

New Total Interest

₹40.9 L

Before vs After

Original EMI
₹43,391
Original tenure
20 yrs
Original total interest
₹54,13,879
Total prepaid
₹5,00,000
EMI after prepayment
₹43,391
Tenure after prepayment
16 yrs 7 mo
Total interest after prepayment
₹40,94,240
Interest saved
₹13,19,639
  • Interest still payable
    ₹40.9 L (76%)
  • Interest saved
    ₹13.2 L (24%)

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How this calculator works

The calculator simulates your loan month by month. In each month, interest is charged on the outstanding balance and the EMI is paid. At the month you choose, the prepayment is deducted directly from principal. Optional yearly prepayments repeat every 12 months after that.

After a prepayment, lenders let you either keep the EMI and finish earlier (reduce tenure) or keep the end date and lower the EMI (reduce EMI). Reducing tenure usually saves more interest. Reducing EMI eases monthly cash flow.

The original schedule is simulated the same way, so the interest saved is a like-for-like comparison.

Formula

Each month: Interest = Balance × r; Balance = Balance + Interest − EMI

At prepayment: Balance = Balance − Prepayment

Reduce EMI: new EMI = EMI(Balance, rate, remaining months)

Interest Saved = Original Interest − Interest with Prepayment

Assumptions

  • The interest rate stays constant.
  • Prepayments are applied right after the EMI of the selected month.
  • Prepayment charges, if any, are not included. Floating-rate home loans taken by individuals generally carry none.
  • A prepayment larger than the outstanding balance closes the loan.

Frequently asked questions

Should I reduce EMI or tenure after prepaying?

Reducing tenure usually saves more interest because the higher EMI keeps repaying principal faster. Reducing EMI is useful if you want lower monthly commitments. Use the toggle to compare both.

When is the best time to prepay a home loan?

Earlier is generally better. In the early years most of the EMI is interest, so reducing principal then saves interest over the longest remaining period.

Are there charges for prepaying a home loan?

For floating-rate home loans to individuals, lenders in India generally do not levy prepayment penalties. Fixed-rate loans and loans to non-individuals may carry charges, so check your loan agreement.

Is it better to prepay or invest?

It depends on your loan rate, expected investment return, tax situation and risk appetite. Prepaying saves interest at your loan rate with certainty, while investment returns are not guaranteed.

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