Loan Prepayment Calculator
Paying extra on your loan — a car or home loan, part or full — shrinks the balance faster, cuts interest, and helps you become debt-free early.
Plan your prepayment
Loan tenure
EMI (monthly)₹23,259
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₹17.26 L
That's 67% less interest on your 7.0% loan — debt-free 12 yr 6 mo sooner
Outstanding balance — original vs prepaid
You become debt-free 12 yr 6 mo early — about 4,566 extra days of financial freedom to live life on your terms.
Assumes a constant 7.0% rate and a fixed EMI, with every extra rupee reducing principal immediately. Lender rules and prepayment fees vary — these are planning estimates.
Interest without prepaying
₹25.82 L
Interest with prepaying
₹8.56 L
Interest saved
₹17.26 L
% less interest
67%
Every rupee you prepay earns a
guaranteed 7.0% return
risk-free and tax-free — that's compounding working in reverse, in your favour.
More each month means more saved and a faster finish (at 7.0%, 20-year tenure). Tap a card to try it.
When you cross each milestone — and how much earlier than the original schedule.
- 25% · Quarter paidOct 20285 yr 11 mo early
- 50% · HalfwayOct 20309 yr early
- 75% · Three-quartersJun 203211 yr 2 mo early
- 100% · Fully paid offJan 203412 yr 6 mo early
- You save ₹17.26 L — 67% less interest on your ₹30.00 L loan.
- Debt-free 12 yr 6 mo sooner — about 4,566 extra days of financial freedom.
- Invested at 11% instead, the same money could gain ~₹10.04 L — market-linked, not guaranteed.
Paying early vs keeping the money
The same ₹20,000/month, two different paths.
Prepay the loan
₹17.26 L
guaranteed interest saved · debt-free 12 yr 6 mo sooner · risk-free
Invest it instead
~₹10.04 L
potential gain at 11% over 7 yr 6 mo — market-linked, not guaranteed, and your loan keeps running.
Prepaying gives guaranteed savings and peace of mind. Investing may give higher returns — but with market risk. Returns shown are illustrative, not advice.
What this means
- You save ₹17.26 L (67%) on a ₹30.00 L loan
- You become debt-free 12 yr 6 mo earlier
- Your EMI of ₹23,259 stays the same — the tenure shrinks
- That's time, freedom and choices on your side
Key takeaways
- Extra payment = lower interest
- Earlier repayment = bigger financial freedom
- Small extra today = huge impact tomorrow
- Prepaying is a guaranteed, risk-free return
- Start early, stay consistent, win big
A small step today creates a debt-free tomorrow.
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Your plan: +₹20,000/month on a ₹30.00 L loan → about ₹17.26 L interest saved, debt-free 12 yr 6 mo sooner.
Plan the rest of your money life
Recheck your EMI, test a balance transfer to a lower rate, or plan the next loan.
These figures are planning estimates based on a constant interest rate and a fixed EMI, with every extra rupee reducing principal immediately. Floating rates move, lenders apply prepayments differently, and prepayment fees vary — confirm the specifics with your lender before acting.
How prepayment savings are calculated
EMI = P × i × (1 + i)ⁿ ÷ ((1 + i)ⁿ − 1)
- EMI
- monthly instalment (kept fixed while you prepay)
- P
- outstanding loan principal
- i
- monthly rate = annual rate ÷ 12 ÷ 100
- n
- tenure in months = years × 12
Worked example
With your inputs — ₹30,00,000 at 7.0% over 20 years: the monthly rate is i = 0.583% and n = 20 × 12 = 240 months, giving an EMI of ₹23,259. The calculator then replays the loan month by month with an extra ₹20,000/month going straight to principal while the EMI stays fixed — the loan clears in 7 yr 6 mo instead of 20 yr, and total interest drops from ₹25.82L to ₹8.56L, saving about ₹17.26L.
Loan prepayment FAQs
Interest is charged on your outstanding balance. Every extra rupee you pay goes straight to the principal, so the balance that future interest is calculated on is smaller. Because we keep the EMI the same, that reduced balance clears sooner — cutting both the tenure and the total interest.
Both help, in different ways. A lump sum makes its biggest dent early, when the outstanding balance — and therefore the interest — is highest. Extra monthly payments compound steadily over the life of the loan. If you have surplus now, prepaying early usually saves the most; otherwise a regular top-up is easier to sustain. You can combine both above.
It depends. Floating-rate home loans for individuals usually have no prepayment or foreclosure charge, but fixed-rate loans and many personal or business loans do — often 1–4% of the amount prepaid. Always check your loan agreement, because a fee can eat into the interest you'd save.
That's your choice with the lender, and it changes the maths. Keeping the EMI the same and shortening the tenure (what this calculator assumes) saves the most interest. Reducing the EMI instead frees up monthly cash flow but stretches the loan over the original term, so the interest saving is smaller.
Prepaying is a guaranteed, tax-free return equal to your loan rate. Investing might earn more, but it carries market risk and isn't guaranteed. If your loan rate is high (personal loans, older home loans) prepaying usually wins; if it's low and you're comfortable with risk, investing can. Never prepay away your emergency buffer.
No. This is a projection based on a constant interest rate and the assumption that your EMI stays fixed and every extra rupee reduces principal immediately. Floating rates move, lenders apply prepayments differently, and fees vary. Treat the result as a planning estimate, then confirm the specifics with your lender.
The complete guide to loan prepayment
Why prepaying early saves the most
Interest is charged on the outstanding balance, which is highest at the start of a loan. Prepaying early — when the balance is biggest — kills the most future interest and shortens the tenure the most. The same rupee prepaid in year one saves far more than in year ten, which is why even a modest early top-up has an outsized effect.
Reduce tenure, not EMI
When you prepay, lenders let you either keep the EMI the same and shorten the tenure, or lower the EMI over the original term. Keeping the EMI fixed (what this calculator assumes) clears the loan sooner and saves the most interest. Lowering the EMI eases monthly cash flow but stretches the loan, so the interest saving is smaller.
Prepay or invest?
Prepaying is a guaranteed, tax-free return equal to your loan rate. Investing the same money might earn more, but carries market risk and isn't guaranteed. A useful rule: if your after-tax loan rate is higher than a safe investment return, prepay; if you can comfortably earn more with acceptable risk, invest. Never prepay away your emergency fund.
Watch for prepayment fees
Floating-rate home loans for individuals usually carry no prepayment penalty, but fixed-rate loans and many personal or business loans charge 1–4% of the amount prepaid. A fee can erase part of the saving, so check your loan agreement first. These figures are planning estimates — confirm your exact rate, fees and prepayment rules with your lender before acting.