Loan Prepayment Calculator
See how a part-payment reduces your tenure or EMI.
Loan Amount
Interest Rate (p.a)
Original Tenure
Prepayment Amount
After Prepayment
Keep paying the same EMI — loan finishes sooner.
Interest Saved
₹7,03,687
New Tenure
15 yr 8 mo
Time Saved
4 yr 4 mo
New Total Interest
₹14,61,864
Without Prepayment
Original EMI
₹17,356
Original Tenure
20 yr
Original Total Interest
₹21,65,552
How this calculator works
A prepayment goes straight toward reducing your outstanding principal, which cuts the interest charged on every remaining instalment for the rest of the loan. You get to choose where that saving shows up: keep the original EMI and finish the loan sooner ("reduce tenure"), or keep the original tenure and drop to a smaller monthly EMI ("reduce EMI").
Why reduce-tenure usually saves more
Reducing tenure while keeping the EMI fixed pays down the loan faster, which stops interest from accruing sooner — this mode almost always saves more total interest than reducing the EMI for the same prepayment amount, because reduce-EMI mode keeps the loan running for the full original tenure, just at a smaller monthly payment. Reduce-EMI is the better choice if your priority is near-term cash flow rather than minimizing total interest paid.
Timing matters
Prepaying earlier in the loan saves more interest than the same amount paid later, because early EMIs are weighted more heavily toward interest — the outstanding principal (and therefore future interest) is largest at the start of the loan and shrinks over time, so a rupee of prepayment made in year one has more remaining interest to eliminate than the same rupee paid in year nine.
A practical limit on prepayment
This calculator caps any single prepayment at 98% of the outstanding loan amount, since paying off the entire principal at once isn't really a "prepayment" scenario the EMI formula is meant to model — at that point you've simply closed the loan.
Check for prepayment penalties first
Some lenders, particularly on fixed-rate loans, charge a prepayment penalty that can offset part of the interest saved — this calculator shows the pure interest-savings math, not any penalty, so check your loan agreement before prepaying a real loan.
Frequently Asked Questions
Does prepaying a loan actually save money?
Yes — any extra payment toward the principal reduces the balance interest is calculated on for every remaining instalment, so prepayment saves total interest and either shortens the tenure or lowers the EMI, depending on which option you choose.
Is it better to reduce EMI or reduce tenure after a prepayment?
Reducing the tenure (keeping EMI the same) typically saves more total interest, since the loan is paid off faster and accrues interest for less time overall. Reducing the EMI instead improves monthly cash flow but saves less interest.
Are there penalties for loan prepayment?
Some lenders charge a prepayment penalty, particularly on fixed-rate loans — this varies by lender and loan type and isn't factored into this calculator, so check your loan agreement before prepaying.
Does when I prepay during the loan matter?
Yes — prepaying earlier saves more interest than the same amount paid later. Outstanding principal (and the interest it generates) is largest at the start of a loan and shrinks over time, so a prepayment made in year one has more future interest to eliminate than the same amount paid in year nine.
Can I prepay 100% of my loan at once?
This calculator caps a single prepayment at 98% of the outstanding balance, since paying off the full principal isn't really a prepayment scenario anymore — at that point the loan is simply closed. For a full payoff, contact your lender directly for the exact foreclosure amount.
This tool provides general estimates for informational purposes only and isn't financial or tax advice. Consult a qualified financial advisor or tax professional before making financial decisions.