Home Loan Prepayment Calculator

Prepaying even a small extra amount each month can shorten a 20-year loan by several years. Enter your current outstanding and see the savings.

Interest saved

₹14,03,609

Interest with vs without prepayment

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How loan prepayment is calculated

The EMI stays the same and the extra money reduces principal directly.
Because interest is charged on the outstanding balance, every rupee prepaid stops earning interest for the bank from the next month.

The loan is re-amortized month by month: Balance₍ₘ₊₁₎ = Balance₍ₘ₎ × (1 + r) − (EMI + extra). The loan ends when the balance reaches zero.

₹40 lakh outstanding at 8.5% with 18 years left: a ₹5 lakh lump sum now saves about ₹14 lakh of interest and 52 EMIs, roughly 4 years 4 months.

Bank keeps the EMI constant and reduces tenure (the default for most lenders).
No prepayment charges (true for floating-rate loans to individuals per RBI rules).

Should I reduce EMI or tenure when prepaying?: Reducing tenure saves far more interest. Reduce the EMI only if your monthly cash flow is tight.
Is it better to prepay or invest?: Compare the loan rate with the post-tax return you expect from investing. Prepayment is a risk-free return equal to your loan rate.

Last reviewed 2026-10-31. Results are estimates for information only and do not constitute financial, tax or legal advice.

Frequently asked questions

Should I reduce EMI or tenure when prepaying?

Reducing tenure saves far more interest. Reduce the EMI only if your monthly cash flow is tight.

Is it better to prepay or invest?

Compare the loan rate with the post-tax return you expect from investing. Prepayment is a risk-free return equal to your loan rate.