Loan Prepayment Calculator 2026
See how making a lump sum payment or extra monthly EMI can save you lakhs in interest and reduce your loan tenure significantly.
Existing Loan Details
Range: ₹1,00,000 - ₹5,00,00,000
Range: 5% - 25% p.a.
Range: 1 - 30 years
Prepayment Strategy
Enter lump sum amount you can pay now
Pro Tip: Prepaying in early years saves maximum interest!
Total Interest Saved
₹ 0
By making this prepayment
Tenure Reduced By
0 Yrs 0 Mos
Loan finishes faster!
Total Interest Comparison
New Amortization Schedule
| Month | EMI Paid | Interest | Principal | Balance |
|---|
Why Should You Prepay Your Loan?
In any long-term loan (like a Home Loan or Auto Loan), the interest component forms a huge chunk of your total repayment. The earlier you prepay, the more you save. Even paying just one extra EMI a year or a small lump sum bonus can drastically reduce your overall tenure and interest burden.
Early Years = Maximum Savings
In initial years, EMI consists mostly of interest. Prepaying early reduces principal faster.
Zero Prepayment Charges
RBI guidelines mandate ZERO charges on floating-rate home loans for prepayment.
Better Financial Freedom
Becoming debt-free earlier gives you peace of mind and financial flexibility.
Prepayment Rules to Remember
- Home Loans: RBI guidelines mandate ZERO prepayment or foreclosure charges on floating-rate home loans.
- Personal Loans: Banks may charge a foreclosure fee ranging from 2% to 5% if you prepay before a certain lock-in period.
- Car Loans: Typically allow prepayment with 2-4% charges depending on the lender.
- Timing Matters: Prepaying in the early years of your loan saves significantly more interest compared to prepaying in the later years.
❓ Frequently Asked Questions
Does prepayment reduce EMI or tenure?
You have two options: 1) Reduce EMI - Keep tenure same, lower monthly payments. 2) Reduce Tenure - Keep EMI same, finish loan faster. Most banks allow you to choose either option. This calculator shows tenure reduction benefit.
Is there any penalty for prepayment?
For floating-rate home loans, RBI has banned prepayment penalties. For fixed-rate loans and other loan types, penalties may apply (typically 2-5% of prepaid amount). Always check with your lender before making prepayment.
Should I prepay my home loan or invest?
This depends on your loan interest rate vs. expected investment returns. If loan rate > 8% and you have low risk appetite, prepayment is better. If you can earn > 10-12% returns and have high risk appetite, investing may be better. Tax benefits also play a role.
How much can I save by prepaying ₹1 lakh?
On a ₹25 lakh loan at 8.5% with 15 years remaining, prepaying ₹1 lakh can save approximately ₹1.2-1.5 lakh in interest and reduce tenure by 8-12 months. Use our calculator to see exact savings for your loan!