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Loan Prepayment Calculator - Save Interest and Cut Tenure

See exactly what a prepayment does to your loan, live as you type. Enter your outstanding loan amount, interest rate, and remaining tenure, then add a prepayment amount, how often you pay it (one-time, every month, or every year), and the month it starts. Watch your new monthly EMI, the total interest you save, the prepayment charges the bank may take, and how many months you trim from the loan. Go further than most prepayment calculators: run a Prepay vs Invest comparison to see whether paying off the loan or investing the same money at an alternative return is the smarter move, and read a full year-by-year prepayment amortization breakdown.

Rs
Rs 1,000 Rs 5,00,000 Rs 1 Cr
% p.a.
years
Rs
Rs 0 Rs 10,000 Rs 1 Cr
This prepayment amount repeats according to the frequency you choose below. Set 0 to see the loan with no prepayment.
One-time pays the amount once. Monthly pays it every month. Yearly pays it once every 12 months, starting from the start month.
month
Month 1 Month 13 Month 480
The month (from today) when the first prepayment happens. Model a future lump sum, such as a bonus or a salary rise, instead of assuming you prepay right away.
%
0% 0% 10%
A unique feature most prepayment tools ignore: some lenders charge a penalty on the amount prepaid (often 1-5% on fixed-rate loans). The calculator subtracts this charge to show your true net saving. Floating-rate personal and home loans in India usually carry no charge, so keep 0 for those.
% p.a.
0% 10% 30%
The annual return you could realistically earn if, instead of prepaying, you invested each prepayment amount. The calculator then compares the future value of those invested payments against your net interest saved, so you can see which choice leaves you better off.
Monthly EMI
0
Net Interest Saved
0
New Tenure (Months)
0
Total Payment
0
Months Cut From Loan -
Prepayment Charges Paid -
Gross Interest Saved (before charge) -
Total Prepaid (incl. charges) -
Prepay vs Invest Outcome -
Interest Without vs With Prepayment
Your Prepayment at a Glance

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How to Use the Loan Prepayment Calculator

1

Enter your outstanding loan amount

Type or drag the current balance left on your loan, not the original amount you borrowed. It can go from Rs 1,000 up to Rs 1 crore.

2

Set the annual interest rate

Enter the rate your lender currently charges, or tap a preset chip (7%, 8%, 9%, 10%, 12%). This is the rate you are effectively earning, tax-free, on every rupee you prepay.

3

Choose the remaining tenure

Select how many more years you have left on the loan, or use the preset chips (10y, 15y, 20y, 25y, 30y). This is the schedule you are starting from before any prepayment.

4

Set your prepayment amount and frequency

Enter the amount you can prepay and choose one-time, every month, or every year. Set the amount to 0 to compare against a loan with no prepayment at all.

5

Set the start month and any charge

Choose the month the first prepayment happens so you can model a future bonus or salary rise, and enter the prepayment penalty percentage (if any) your lender charges so the calculator shows your true net saving.

6

Compare prepay vs invest

Set the alternative investment return to see whether paying off the loan or investing the same money would leave you better off. Review your summary, donut, insights, and year-by-year breakdown, or reset to defaults anytime.

Loan Prepayment Calculator - Find Out How Much a Prepayment Really Saves You

Making a prepayment on a home loan, personal loan, or car loan is one of the surest ways to cut its true cost - but it is surprisingly hard to know exactly how much you save without running the maths. This Loan Prepayment Calculator makes it concrete and instant: enter your outstanding balance, interest rate, remaining tenure, a prepayment amount, how often you make it, and the month it starts - and see your new monthly EMI, the total interest you save, the charges the bank may deduct, and exactly how many months you wipe off the loan.

Most of the repayment of a loan runs on a reducing balance structure: your EMI is split into an interest part and a principal part, and in the early years most of each payment is interest. Because prepayment goes straight off the principal, the balance falls faster, less interest accrues on every remaining month, and that saving compounds across the whole loan. Use this tool to plan a lump-sum bonus payment, a monthly top-up, or an annual prepayment - and to see, rupees and months at a time, how quickly the debt shrinks.

The New Features - What You Get Here That Other Prepayment Calculators Don't

Many prepayment tools only take a lump sum made today. This calculator goes further with four features that turn a single number into a complete prepayment plan:

1. Three Prepayment Frequencies and a Start Month. Choose one-time, monthly, or yearly prepayments, and set the exact month the first one happens. This means you can model a real plan - for example, prepaying every May after your bonus, or once you clear a different debt - rather than assuming you pay today. Very few tools let you delay or repeat a prepayment with this kind of flexibility.

2. Prepayment Charges / Penalty. Some lenders charge a percentage of the amount prepaid, commonly 1-5% on fixed-rate loans. This calculator subtracts that charge to show your true net saving, so you are not misled by a gross figure that you can never actually keep.

3. Prepay vs Invest Comparison. The classic question: is it better to prepay my loan or invest the same money? By setting an alternative investment return, this calculator grows each prepayment at that rate until the original loan would have ended, then compares the future value of the invested money against your net interest saved. It tells you plainly which choice wins, helping you decide with real numbers instead of guesswork.

4. Full Prepayment Picture. A donut contrasts the total interest you would have paid without the prepayment against what you pay with it, smart insights summarise the months saved and the net saving, a "Your Prepayment at a Glance" card lists the key numbers, and a year-by-year amortization table shows the opening balance, prepaid amount, principal paid, interest paid, and closing balance for every single year.

How the Prepayment Saving Is Calculated

First the calculator works out your monthly EMI from the outstanding balance, the annual rate, and the remaining tenure, using the standard EMI formula. It then simulates the loan month by month. Without any prepayment, the total interest is simply the EMI multiplied by the number of months, minus the principal. With a prepayment, it applies the prepayment on the correct months according to your chosen frequency and start month, subtracts any charge, and recomputes the falling balance. The gross interest saved is the total interest without the prepayment minus the total interest with it; the net interest saved is that figure minus all the charges paid.

Example: An outstanding home loan of Rs 5,00,000 at 8% for 20 years has an EMI of about Rs 4,182 and a total interest cost of about Rs 5,03,682. If you prepay Rs 10,000 every year starting in month 13 with no charge, the loan closes several months earlier and the total interest falls noticeably - a saving of tens of thousands of rupees before you factor in the extra Rupees you are no longer sending to the bank. Raise the prepayment amount or make it monthly and the saving climbs even further.

Understanding the Insights and Breakdown

Beyond the headline numbers, this calculator gives you a few quick-read figures:

  • Months Cut From Loan: How many months earlier the loan closes compared with the original schedule - the clearest measure of how a prepayment shortens your debt.
  • Prepayment Charges Paid: The total penalty deducted across all prepayments, so you can check what the bank keeps before you decide.
  • Gross Interest Saved: The interest you would have paid without the prepayment minus the interest you actually pay with it.
  • Total Prepaid: The cumulative prepayment amount plus all charges you hand over, so you can see the total cash you are putting in.
  • Prepay vs Invest Outcome: The comparison between investing each prepayment at your chosen alternative return and the net interest you save. When the invested money would grow to more than your net saving, investing wins; otherwise prepaying wins.
  • Year-wise Prepayment Amortization: A table for every year with the opening balance, prepaid amount, principal paid, interest paid, and closing balance - so you can follow exactly when each prepayment lands and how the balance collapses.

Should You Prepay or Invest?

This is one of the most common and genuinely important questions in personal finance, and this calculator is built to answer it directly. Prepaying earns you the loan's interest rate, guaranteed and tax-free, for the remaining life of the loan. Investing earns whatever your portfolio actually delivers, which is uncertain. As a simple guide: if the loan's interest rate is clearly higher than the alternative return you can reliably earn after tax, prepaying tends to win; if your investments reliably beat the loan rate by a healthy margin, keeping the loan and investing can come out ahead.

By setting the Alternative Investment Return field, you can test both sides with your own numbers. Keep in mind that the "return" from investing is never certain, while interest saved by prepaying is locked in. For most people with a home loan - especially in the early years, when so much of each EMI is interest - prepaying is the lower-risk, more predictable choice.

Frequently Asked Questions About Loan Prepayment

The saving depends on your outstanding balance, rate, remaining tenure, the amount you prepay, and how often. Because prepayment goes straight off the principal, you effectively earn the loan's interest rate, tax-free, on that money for the rest of the loan. On a Rs 5,00,000 loan at 8% for 20 years, prepaying Rs 10,000 a year saves a meaningful portion of the roughly Rs 5 lakh of interest the loan would otherwise cost. Enter your own numbers here to see the exact rupees and months.
It depends on the loan type. For floating-rate home loans, RBI regulations bar banks from charging prepayment penalties to individual borrowers - so prepaying a floating home loan is normally free. For fixed-rate loans, and for many personal and car loans, lenders may charge a penalty of 1-5% of the amount prepaid. Use the Prepayment Charge field in this calculator to account for it and see your true net saving.
Reducing the tenure keeps your EMI the same and closes the loan sooner, which maximises the interest saved. Reducing the EMI lowers your monthly burden but saves less interest overall. This calculator models keeping the EMI constant and letting the prepayment cut the tenure, which is generally the best way to slash total interest. If your monthly cash flow is tight, a lower EMI can still be wise - the trade-off is your choice.
It lets you delay the first prepayment to a future month, which is useful if you plan to prepay with a bonus, a salary rise, or after clearing another debt rather than today. Because interest accrues monthly, a prepayment made later saves less than one made now. The start month helps you compare "prepay today" against "prepay in 12 months" and see the real difference the timing makes.
Each time you make a prepayment, the calculator imagines that same money being invested instead at your chosen Alternative Investment Return, and grows it monthly until the original loan would have ended. It then compares the future value of all those invested payments against the net interest you saved by prepaying. If the invested amount is higher, investing wins; if the net interest saved is higher, prepaying wins. It is a genuinely useful guide - but remember the investment return is not guaranteed, while the interest saved is fixed.
Almost always keep an emergency fund first - three to six months of expenses in a liquid account - before putting a large lump sum into prepayment. A loan is cheaper to keep than to re-borrow in a crisis. After your emergency fund is safe, prepaying is generally a strong, low-risk way to reduce your debt, especially when your loan rate is higher than what your safe investments can earn.