Loan Prepayment Calculator India 2026
See exactly how much interest you save and how many years you cut by making extra payments — lump sum, monthly top-up, or annual bonus prepayment. Compares 4 strategies side by side.
Your loan details
How do you want to prepay?
What different prepayment amounts save you
| Prepayment strategy | Loan clears in | Time saved | Interest saved |
|---|---|---|---|
| No prepayment (baseline) | 20y 0m | — | — |
| Pay 1 extra EMI/year | 16y 8m | 3y 4m | ₹10.60 L |
| +₹5,000/month extra | 15y 7m | 4y 5m | ₹14.12 L |
| +₹10,000/month extra | 12y 10m | 7y 2m | ₹22.70 L |
| +₹25,000/month extra | 8y 8m | 11y 4m | ₹34.34 L |
Prepayment strategy for salaried employees
Prepayment FAQ
When is the best time to prepay a home loan?
As early as possible — home loan EMIs are front-loaded with interest. In the first 5–7 years, 85–90% of your EMI goes to interest, not principal. A ₹5L prepayment in Year 1 saves 3–4× more interest than the same ₹5L prepaid in Year 15. The math is unambiguous: prepay early, prepay often.
Should I reduce EMI or reduce tenure when prepaying?
Reduce tenure, not EMI. If you reduce tenure, you pay off faster and save more total interest. If you reduce EMI, your monthly burden reduces but you keep the loan for the same duration — saving less. The only reason to reduce EMI is if you have cash flow pressure. Otherwise, always choose tenure reduction.
Can banks charge for home loan prepayment?
For floating rate home loans: No. RBI has banned prepayment penalties on floating rate retail loans (home loans, personal loans). Your bank CANNOT charge you for prepaying on a floating rate loan. For fixed rate loans: Banks can charge 1–2% of prepaid amount. Check your loan agreement — most home loans in India are floating rate.
Prepay loan vs invest the surplus — which is better?
Compare after-tax returns. Home loan at 8.75% with old regime tax benefit (₹2L interest deduction): effective rate ~7%. Equity mutual fund expected return: 12%+. Mathematically, investing beats prepaying. But: prepayment is guaranteed and risk-free; equity returns are uncertain. Most financial advisors recommend a blend — prepay until outstanding < 50% of original, then invest surplus.
How much does 1 extra EMI per year save?
On a ₹50L loan at 8.75% for 20 years (EMI ≈ ₹44,000): one extra EMI = ₹44,000/year prepayment. This typically saves ₹6–8L in total interest and reduces tenure by 2–3 years. The exact number depends on when in the loan tenure you start, but one extra EMI/year is one of the simplest and most effective prepayment strategies.