Loan Prepayment Calculator
Prepaying a loan — putting extra money towards the principal beyond your regular EMI — is one of the most effective ways to save on interest, especially in the early years when interest is highest. This loan prepayment calculator shows the payoff clearly. Enter your loan details and a prepayment amount, and it compares two futures: sticking with the original schedule, or prepaying and shortening the loan. You will see how much total interest you save and how many months earlier the loan closes. Whether you have a year-end bonus, a maturing FD, or simply some surplus each month, this tool helps you decide whether prepaying or investing the money makes more sense for you.
Optional: pay this much more than the EMI each month.
Interest Saved
₹15,48,806
Tenure Reduced By
6y 3m
From 20y 0m to 13y 9m.
Interest (before)
₹34,78,027
Interest (after)
₹19,29,221
Original EMI
₹26,992
About the Loan Prepayment Calculator
A loan prepayment calculator estimates the interest and tenure you save when you pay more than your scheduled EMI. The extra amount goes straight to the principal, which lowers the balance on which future interest is charged — so every rupee prepaid early saves multiple rupees of interest.
Why it is useful
Lenders front-load interest, so a prepayment in year two of a 20-year loan is far more powerful than the same amount in year fifteen. This calculator quantifies that advantage, helping you decide between prepaying the loan and investing the surplus elsewhere, and showing why keeping the EMI fixed (rather than reducing it) maximises savings.
How the calculation works
The calculator recomputes your amortization schedule after applying the prepayment to the outstanding principal. Keeping your EMI the same, it shows the loan closing sooner; the interest saved is the difference between the original total interest and the new total interest.
Key inputs explained
- Outstanding loan & rate: Your current balance and interest rate.
- Remaining tenure: How many months or years are left on the loan.
- Prepayment amount: A one-time lump sum or a regular extra payment.
Example calculation
Inputs
- Original loan
- ₹30,00,000 at 8.5% for 20 yrs
- Prepayment
- ₹3,00,000 (one-time, year 2)
- EMI kept
- Unchanged (₹26,035)
Calculation breakdown
- Balance before prepayment
- ≈ ₹28.7 lakh
- Balance after prepayment
- ≈ ₹25.7 lakh
- Schedule recomputed
- Same EMI, fewer months
A single ₹3 lakh prepayment early in the loan saves several times its value in interest because the balance shrinks while interest is still being charged on the full amount.
Benefits
- Quantifies the interest you save before you commit funds.
- Shows how many months earlier your loan closes.
- Helps you compare prepaying versus investing the money.
Limitations
- Some loans charge prepayment or foreclosure fees.
- Assumes the prepayment reduces tenure, not EMI.
- Does not account for the returns you forgo by not investing the surplus.
Tips
- Prepay as early as possible — front-loaded interest makes it most effective.
- Reduce tenure, not EMI, to maximise interest savings.
- Compare the interest saved with what the money could earn invested.
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About this calculator
The Loan Prepayment Calculator is built and maintained by the PaisaBot team. All calculations run instantly in your browser using established financial formulas, and we use high-precision arithmetic to keep the results reliable.
Data accuracy: Interest rates, tax slabs, and scheme rules are updated periodically, but figures can change with RBI, government, and lender revisions. Always confirm the latest rates with your bank or an official source before acting.
Educational purpose: This tool is provided for general information and financial education only. It does not constitute investment, tax, or legal advice. For decisions specific to your situation, please consult a qualified financial advisor.