Home Loan Prepayment Calculator

It takes your outstanding balance, interest rate and months remaining, works out your current EMI, then recalculates how long the loan runs once a lump sum is knocked off the principal. Because the EMI stays the same, the tenure shortens — and the interest you would have paid across those removed months is the saving.

Either, but you have to ask. By default most Indian lenders keep the EMI and shorten the tenure, which saves far more interest. If you ask them to reduce the EMI instead, the tenure stays and you save much less. This calculator models the tenure-reduction option because it is both the default and the better one.

Not on floating-rate home loans taken by individual borrowers — the RBI prohibits foreclosure and prepayment charges on those. Fixed-rate home loans can carry a fee, typically 2 to 4 per cent of the amount prepaid. Check your sanction letter for which type you hold before making a large prepayment.

Early, and the difference is large. Home loan EMIs are interest-heavy at the start, so a prepayment in the first years removes interest that has not accrued yet. The same amount paid in the final years mostly retires principal you were about to clear anyway, and saves comparatively little.

On a ₹40 lakh balance at 8.5% with 18 years left, a ₹5 lakh prepayment saves roughly ₹14 lakh in interest and ends the loan about four and a half years sooner. The saving scales with how much interest is still ahead of you, which is why the same amount is worth far more in year three than year fifteen.

Compare your home loan rate against the return you would earn after tax. A prepayment is a guaranteed, risk-free return equal to your interest rate — around 8.5% for most home loans. An investment has to beat that after tax and after risk to be the better call, which is a higher bar than it first appears.