Interest saved + tenure cut

EMI Prepayment Calculator

See exactly how much interest you save and how many months you shave off your loan by prepaying a lump sum or paying extra EMI each month.

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% p.a.
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Assumed paid now, at the start of the loan. EMI stays the same; tenure shortens.

Interest Saved

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Enter your loan details and prepayment

Without vs With Prepayment

Enter values to compare.

How Prepayment Saves You Money

Monthly EMI

P·r·(1+r)ⁿ ÷ ((1+r)ⁿ−1)

r = monthly rate, n = months

Interest Saved

Interest(before) − Interest(after)

EMI kept fixed, tenure reduced

What Is Loan Prepayment?

Prepayment (also called part-payment, and foreclosure when you clear the whole loan) means paying off more of your loan principal than your scheduled EMI. Because interest is charged on the outstanding principal, reducing that principal early means every remaining month accrues less interest. If you keep paying the same EMI, the loan finishes sooner and your total interest drops sharply.

Worked Example

A ₹30,00,000 home loan at 8.5% p.a. over 20 years has an EMI of about ₹26,035 and total interest of roughly ₹32.5 lakh. Prepay ₹5,00,000 at the start and keep the EMI the same: the loan closes years earlier and you save several lakh in interest. Try your own figures above and switch between a lump sum and a small monthly extra.

Why It's Useful

  • Quantify the benefit of a bonus or windfall before you commit it.
  • Compare a one-time lump sum against paying extra every month.
  • Decide between prepaying a loan and investing the same amount.
  • Plan a foreclosure date for a home, car or personal loan.

Frequently Asked Questions

Common loan prepayment questions

How does loan prepayment save interest?
Interest is charged on the outstanding principal each month. When you prepay, the principal drops immediately, so every future month accrues less interest. If you keep the same EMI, the loan also ends sooner — cutting both the tenure and the total interest paid.
Lump sum or extra EMI every month — which is better?
Both help. A one-time lump sum early in the loan gives the biggest single saving because principal falls the most when interest is highest. A small extra amount every month is easier to budget and, over time, can save a comparable amount. Use the two modes here to compare.
Are there charges for prepaying a loan in India?
For floating-rate home loans to individuals, the RBI bars prepayment/foreclosure penalties. Fixed-rate loans and many personal or car loans may levy 2%–5% of the prepaid amount. Always check your loan agreement and weigh any charge against the interest you would save.
When is the best time to prepay a loan?
As early as possible. In the initial years a large share of each EMI is interest, so prepaying then removes the most future interest. Prepaying in the final years saves comparatively little because most interest has already been paid.
Should I reduce the EMI or the tenure when I prepay?
Keeping the EMI the same and reducing the tenure saves far more interest because the loan closes earlier. Reducing the EMI lowers your monthly outgo but keeps you in debt for the full term. This calculator keeps the EMI fixed and shows the shorter tenure.

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