Loan Prepayment Calculator
Interest saved by a one-time or yearly part payment.
Optional
After prepayment, reduce
Optional
Usually 0% on floating-rate loans to individuals.
Your result
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Enter your numbers to see the result.
This loan prepayment calculator shows how much interest you save by paying extra towards your loan. Enter your outstanding balance, rate and remaining tenure, add a one-time part payment, a yearly prepayment or both, and choose whether to cut your tenure or your EMI. You will see the interest saved and your new EMI or end date.
What is a Loan Prepayment Calculator?
A prepayment, or part payment, is any amount you pay towards your loan over and above the regular EMI. The extra money goes straight to reducing the principal, so less interest is charged from that point on.
After a prepayment, your lender will usually ask whether you want to keep the EMI and shorten the tenure, or keep the tenure and reduce the EMI. Cutting the tenure saves more interest; cutting the EMI eases your monthly budget. This loan prepayment calculator shows both outcomes so you can choose.
How does the Loan Prepayment Calculator work?
The calculator first finds your current EMI and the interest you would pay if you made no prepayment. It then simulates the loan month by month after taking off your one-time prepayment, and subtracts any yearly prepayment at the end of each loan year.
If you keep the EMI, the loan simply finishes earlier. If you reduce the EMI, it recalculates the EMI over the remaining months after each prepayment. The interest saved is the difference between the two totals, minus any prepayment charges.
How to use the Loan Prepayment Calculator step by step
- Enter your outstanding loan balance from your latest loan statement.
- Enter the current interest rate and the remaining tenure.
- Enter a one-time prepayment, a yearly prepayment, or both.
- Choose whether to reduce the tenure or the EMI.
- Add any prepayment charge your lender applies.
- Compare the interest saved and the new tenure or EMI.
Loan Prepayment Calculator example with real numbers
You owe ₹25 lakh on a home loan at 8.5% with 15 years left, and you receive a ₹3 lakh bonus that you use as a part payment, keeping the same EMI.
| Example input | Value |
|---|---|
| Outstanding loan balance | ₹25,00,000 |
| Interest rate per year | 8.5% |
| Remaining tenure | 15 years |
| One-time prepayment now | ₹3,00,000 |
| Extra prepayment every year (optional) | ₹0 |
| After prepayment, reduce | Tenure (keep EMI) |
| Prepayment charge (optional) | 0% |
| Example output | Value |
|---|---|
| Interest you save | ₹6,35,199 |
| Current EMI | ₹24,618 |
| Interest without prepayment | ₹19,31,328 |
| Interest with prepayment | ₹12,96,129 |
| New tenure | 11 years 11 months |
| Tenure cut by | 3 years 1 month |
The loan prepayment calculator shows you save about ₹6,35,199 in interest and finish 3 years 1 month earlier. Choosing to reduce the EMI instead would save less interest but give you more cash every month.
Key features of this Loan Prepayment Calculator
- One-time and yearly prepayments
- Reduce tenure or reduce EMI
- Prepayment charges included
- Interest with and without prepayment
- Tenure cut shown in years and months
Who should use the Loan Prepayment Calculator?
Who is this Loan Prepayment Calculator for?
- Home loan borrowers with a bonus or windfall
- People choosing between prepaying and investing
- Borrowers who just received an increment
- Anyone planning to close a loan early
Practical use cases
- Deciding what to do with a ₹3 lakh bonus
- Testing a ₹50,000 prepayment every year
- Comparing reduce-EMI and reduce-tenure options
- Checking the benefit of foreclosing a personal loan with a fee
Key benefits
- Clear trade-off: see interest saved for each option.
- Planning power: test yearly prepayments before committing.
- Fair comparison: charges are subtracted from savings.
- Motivation: seeing years cut off the loan helps you stick to the plan.
Tips for better results
- Prepay early in the loan; that is when the interest portion of EMIs is highest.
- Keep an emergency fund before you prepay.
- Compare the loan rate with the after-tax return you could earn by investing the same money.
- Ask your lender to confirm in writing whether the prepayment reduces EMI or tenure.
Common mistakes to avoid
- Prepaying with your entire emergency fund.
- Assuming the lender will reduce the tenure without being told.
- Ignoring prepayment charges on fixed-rate or business loans.
- Prepaying a cheap home loan while carrying expensive credit card debt.
Limitations of this Loan Prepayment Calculator
- It assumes a fixed rate for the remaining tenure.
- Yearly prepayments are applied at the end of each loan year.
- It does not include tax benefits on home loan interest that you may lose by prepaying.
Loan Prepayment Calculator vs other ways to calculate
| Option | EMI | Tenure | Interest saved |
|---|---|---|---|
| Reduce tenure | Same | Shorter | Higher |
| Reduce EMI | Lower | Same | Lower |
| Invest instead | Same | Same | None, but you earn returns |
| Balance transfer | Lower | Same or shorter | Depends on rate gap |
If your rate is high compared with the market, a balance transfer may save more than a prepayment. If you are deciding between prepaying and investing, compare the loan rate with the expected return from the SIP calculator after tax.
Privacy and data handling
This Loan Prepayment Calculator runs entirely in your browser. The numbers you type are not sent to Qorico or stored on any server, and nothing is saved after you close the page. The Copy and Download buttons create the result on your own device. If the page has analytics turned on, it may count that a calculation happened, but it does not record the values you entered.
Loan Prepayment Calculator FAQs
Should I reduce EMI or tenure after prepayment?
Reducing the tenure saves more interest. Reducing the EMI improves monthly cash flow. If your budget is comfortable, cutting the tenure is usually the better money decision.
Are there charges for home loan prepayment?
Under RBI rules, banks and NBFCs cannot charge prepayment or foreclosure penalties on floating-rate term loans taken by individuals for non-business purposes. Fixed-rate and business loans may carry charges.
How much interest do I save with a ₹3 lakh part payment?
On a ₹25 lakh balance at 8.5% with 15 years left, keeping the same EMI, a ₹3 lakh prepayment saves roughly ₹6.3 lakh in interest and ends the loan about 3 years earlier.
Is prepaying a loan better than investing?
It depends on the loan rate and the after-tax return you can earn. Prepaying gives a guaranteed saving equal to the loan rate; investing may earn more but with risk.
When is the best time to prepay a home loan?
Early in the tenure, because the outstanding balance and the interest share of each EMI are highest then.
Can I prepay a personal loan?
Usually yes, but many lenders charge a foreclosure fee of 2–5% on personal loans, and some require a minimum number of EMIs to be paid first.
Related tools
Sources and references
We checked the method and the current figures used in this Loan Prepayment Calculator against these official and primary sources:
- Reserve Bank of India
- RBI: Levy of foreclosure charges on floating rate term loans
- National Housing Bank
Written and reviewed by the Qorico Team
