💳 Loan Prepayment Savings Calculator
Pay a little extra every month — see how much interest you save and how early you finish.
- Fixed Rate Assumption: This calculator assumes your interest rate remains constant. For floating-rate loans, actual savings will vary as rates change.
- Bank Terms Vary: Prepayment terms, minimum amounts, and processing differ by lender. Always verify with your bank before making prepayments.
- Not Financial Advice: This tool is for educational purposes only. Consult your lender or a certified financial advisor before making loan decisions.
- No Charges Included: Any applicable prepayment charges are not factored into this calculation. Check your loan agreement.
On a ₹30L home loan at 8.5% for 20 years, paying just ₹5,000 extra per month can save over ₹8 lakhs in interest and finish your loan ~5 years early. This calculator shows you the exact numbers for your loan.
How Loan Prepayment Works in India
Every extra rupee you pay above your EMI goes directly to reducing your principal. Since interest is calculated on the outstanding balance, a lower principal means less interest accrues each month — creating a compounding effect in reverse.
Frequently Asked Questions
Should I prepay my home loan or invest the extra amount?
If your loan rate (e.g. 8.5%) is higher than your expected post-tax investment return, prepay. If you can consistently earn more in equity (12%+) and your loan rate is low, investing may win. Use the Smart Home Loan Analyzer to compare both paths.
Does prepayment attract any charges?
For floating-rate home loans from banks, RBI guidelines prohibit prepayment charges. Fixed-rate loans may have penalties. Always check your loan agreement before prepaying.
Is it better to reduce EMI or tenure when prepaying?
Reducing tenure saves significantly more interest. Reducing EMI improves your monthly cash flow. This calculator models tenure reduction — the mathematically superior choice for interest savings.
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