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Home Loan Prepayment Calculator India
See how much a little extra on your loan saves, and how many years it cuts. It works for any loan: put in the balance, the rate, and the extra you can spare, and watch the interest and the tenure shrink.
₹5,000 more a month on a ₹50 lakh loan at 8.5% clears it 4 years 5 months early and saves about ₹13.9 lakh in interest. The bank will never remind you to do it.
About the prepayment calculator
The prepayment calculator shows what an extra payment does to your loan: the interest you save and the years you cut. Your EMI stays the same, but more of it goes to principal, so the loan ends sooner. Below the tool is why early prepayment saves the most, whether to cut the EMI or the tenure, and when investing beats prepaying.
| Extra a month | Loan clears in | Interest saved |
|---|---|---|
| Nothing | 20 years | ₹0 |
| ₹5,000 | 15 years 7 months | ₹13.9 lakh |
| ₹10,000 | 12 years 11 months | ₹21.8 lakh |
| ₹15,000 | 11 years 1 month | ₹27 lakh |
The extra goes straight to the principal, so it works in your favour for the rest of the loan. Even ₹5,000 a month ends a twenty-year loan nearly four and a half years early. Enter your own loan above for your figure.
How much does prepaying actually save?
More than most people expect. On the calculator's default, a ₹50 lakh home loan at 8.5% over 20 years, an extra ₹5,000 a month clears it about 4 years 5 months early and saves roughly ₹13.9 lakh in interest, for about ₹9.3 lakh of extra payments put in. Enter your own balance, rate and extra above; the earlier in the loan you are, the more there is to save.
How does the calculator work it out?
It simulates your loan month by month at your EMI, then runs it again with your extra payments applied straight to the principal, and compares the two. The gap between them is the interest you save and the months you cut off the tenure. It handles a monthly extra, a yearly lump, and a one-time lump sum together, so you can test a real plan.
Does a small prepayment really matter?
Yes, and most of all early on, because early EMIs are almost entirely interest.
| Year of the loan | Share going to interest | Going to principal |
|---|---|---|
| Year 1 | 81% | ₹99,511 |
| Year 5 | 73% | ₹1.4 lakh |
| Year 10 | 59% | ₹2.13 lakh |
| Year 15 | 37% | ₹3.26 lakh |
| Year 20 | 4% | ₹4.97 lakh |
In the early years almost every rupee of your EMI is interest. A prepayment now lands on the biggest balance, which is why it kills the most interest and years of the loan.
Should I reduce the EMI or the tenure?
Cutting the tenure saves far more interest, because you close the loan sooner and stop paying interest at all. Cutting the EMI only eases your monthly cash flow while the loan runs just as long. If you can keep paying the same EMI after a prepayment, always choose to shorten the tenure.
Prepay, or invest the money instead?
Compare your loan rate with what your investments reliably earn after tax. Clearing an 8.5% loan is a guaranteed, tax-free return of 8.5%, which is hard to beat safely. If your after-tax return from a SIP is clearly and reliably higher, investing can win; if it is close, the certainty of prepaying usually wins. Run both rather than guessing, and never skip either to fund a want.
When in the loan should I prepay?
As early as you can. The same amount prepaid in year one removes far more interest than in year fifteen, because early on it lands on a much larger balance, as the table above shows. A bonus or windfall in the first years of a loan is worth the most it will ever be.
Are there prepayment charges?
On floating-rate home loans in India there are usually none, by RBI rule. Fixed-rate loans, and some personal or business loans, may charge a prepayment fee, so check your sanction letter before making a large prepayment. Where a fee applies, weigh it against the interest you would save, which is almost always far larger.
A lump sum, or a little every month?
Both work, and the tool models a monthly extra, a yearly lump, and a one-time lump sum at once. A steady monthly extra is the easiest to sustain and steadily does the job; a bonus put in early lands a bigger single blow. The rule is the same either way: sooner is better, and every rupee to principal.
Should I prepay before or after building an emergency fund?
Keep your emergency fund first. Prepaying money you might need back leaves you cash-poor and forced to borrow again, at a worse rate, the moment something goes wrong. Build the buffer, then send the genuine surplus at the loan.
Is prepaying worth losing the home-loan tax break?
Usually yes. The deduction only offsets part of the interest, and under the new tax regime the self-occupied home-loan interest deduction is gone entirely, so for most borrowers the interest saved by prepaying beats the tax saved. Run your own numbers, especially if you are on the old regime and near the ₹2 lakh interest cap.