Loan EMI Prepayment Calculator
Calculate savings from loan prepayment. See how extra payments reduce your loan tenure and total interest.
About this calculator
A prepayment is any lump sum you pay toward your loan principal on top of your regular EMIs. This calculator shows exactly what a prepayment does to your loan: how many months it takes off the tenure, or how much it lowers your EMI, and how much interest you save in total.
It works for an existing loan, so you enter the original amount, rate and tenure, how many EMIs you have already paid, and the lump sum you plan to prepay. You choose the preference that matches what your lender will do: keep the EMI and finish earlier, or keep the tenure and pay a lower EMI. Keeping the EMI is almost always the bigger saver, which the numbers below make clear.
How to use it
- Enter the Loan Amount you originally borrowed.
- Enter the Interest Rate on the loan.
- Enter the Original Tenure in years.
- Enter the number of EMIs Paid So Far.
- Enter the Prepayment Amount you plan to pay.
- Choose Reduce Tenure or Reduce EMI and press Calculate Prepayment Savings.
Tips and common mistakes
- Ask your lender for a prepayment statement before paying. It confirms the exact balance and any charge.
- Prepaying earlier saves much more than prepaying later, because there is more time for the interest to have accrued.
- Floating-rate home loans to individuals generally carry no prepayment penalty, but fixed-rate or business loans may.
- Do not drain your emergency fund to prepay. A loan you can service is cheaper than an emergency on a credit card.
Frequently asked questions
Should I reduce tenure or reduce EMI after prepaying?
Reducing the tenure saves more interest because you keep paying the same high EMI against a smaller balance. Reducing the EMI eases monthly cash flow but saves less interest. Choose tenure reduction unless you need the cash flow.
How much interest does a prepayment save?
It depends on the amount, the rate and how early it is made. On a ₹50 lakh, 8.5%, 20-year loan, ₹5 lakh prepaid after two years saves about ₹14.5 lakh.
What if the prepayment clears the whole loan?
The tool tells you so. In that case ask your lender for a foreclosure statement.
Is there a prepayment penalty?
For floating-rate loans to individuals in India, regulations bar prepayment charges. Fixed-rate loans and loans to businesses can still carry them. Check your sanction letter.
Can I make regular prepayments instead of one lump sum?
Yes. The Loan Prepayment Calculator on this site models annual and quarterly prepayments.
Why is the saving larger than the prepayment itself?
Each rupee prepaid also removes all the future interest it would have generated, over the remaining years of the loan.