Loan Prepayment Calculator

See exactly how much interest you save by making a prepayment on your loan. A small prepayment today can save you lakhs in interest.

Loan Amount₹50,00,000

Interest Rate8.5%

Loan Tenure20 Years

Prepayment Amount₹5,00,000

You Save in Interest

₹8.2L

And finish your loan 2.5 years earlier

Lower rate = bigger savingsCompare Lower Rate Loans →

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About Prepayment

Why Loan Prepayment Saves You Money

Loan prepayment means paying extra towards your loan principal beyond your regular EMI. Since interest is calculated on the outstanding principal, reducing the principal early dramatically cuts the total interest you pay over the loan tenure.

⚡ Reduce Tenure

When you prepay, you can choose to reduce loan tenure. This saves maximum interest as you finish the loan years earlier.

💰 Reduce EMI

Alternatively, prepayment can reduce your monthly EMI while keeping the same tenure — improving monthly cash flow.

📅 Earlier is Better

Prepaying in the early years of your loan saves much more interest than prepaying later, since early EMIs are mostly interest.

🆓 No Charges

As per RBI rules, banks cannot charge prepayment penalty on floating rate home loans. Verify charges before prepaying fixed-rate loans.

FAQ

Prepayment — Common Questions

Is loan prepayment worth it?+

Yes, almost always. Prepaying a ₹50 lakh loan at 8.5% with a single ₹5 lakh prepayment in year 5 can save over ₹8 lakhs in interest and finish your loan years earlier.

Should I reduce EMI or tenure on prepayment?+

Reducing tenure saves significantly more interest. Choose tenure reduction if you can continue paying the same EMI comfortably. Choose EMI reduction only if you need lower monthly outflow.

Is there a prepayment penalty?+

As per RBI guidelines, there is no prepayment penalty on floating rate home loans. Fixed-rate loans and some personal loans may have a 2-5% prepayment charge.