Loan Prepayment Calculator
Compare reducing your EMI versus reducing tenure after a part-prepayment, and the interest each saves.
About the Loan Prepayment Calculator
Enter the outstanding balance, the interest rate, the months left and the amount you can prepay now. The calculator compares two choices: keep the EMI and finish early, or keep the tenure and lower the EMI, and shows the interest each saves.
A part-prepayment cuts the outstanding principal. Keeping the same EMI and shortening the tenure saves the most interest; lowering the EMI eases monthly cash flow. In India, banks can't charge prepayment penalties on floating-rate loans to individuals.
The formula
New months = −ln(1 − B·i ÷ EMI) ÷ ln(1 + i)
Worked example
₹25 lakh outstanding at 8.5% with 180 months left; prepay ₹2.5 lakh
- Current EMI: ₹24,618.49
- Reduce tenure: finish 32 months early, saving about ₹5,42,297
- Reduce EMI instead: EMI ₹22,156.64, saving about ₹1,93,133
Questions people ask
Which should I choose?
Reduce tenure if you can afford the EMI; it saves far more interest.
Is there a penalty?
Not on floating-rate home loans to individuals in India; fixed-rate loans may charge 2–3%.
Should I prepay or invest?
Prepaying earns a guaranteed return equal to the loan rate; compare it with what you'd expect to earn after tax.