🏦 Loan
Loan Prepayment Calculator
See how much interest you save by making a partial prepayment on your loan. Compare reducing EMI vs reducing tenure after prepayment.
Loan & Prepayment Details
₹10K₹10 Cr
1%36%
1 yr30 yrs
0360
₹0₹1 Cr
Total Interest Saved
₹--
by making this prepayment
Outstanding Balance--
Balance After Prepayment--
Months Saved (reduce tenure)--
New EMI (if reduce EMI)--
Without vs With Prepayment
How Prepayment Works
Outstanding Balance after m EMIs:
Bal = P × (1+R)m − EMI × [(1+R)m−1]/R
After prepayment: New Balance = Bal − Prepayment Amount
Recalculate tenure or EMI on New Balance
Bal = P × (1+R)m − EMI × [(1+R)m−1]/R
After prepayment: New Balance = Bal − Prepayment Amount
Recalculate tenure or EMI on New Balance
Reducing tenure (keeping same EMI) saves more interest than reducing EMI. On floating rate loans, banks in India cannot charge prepayment penalty (RBI circular).
Frequently Asked Questions
Reducing tenure always saves more total interest. However, reducing EMI improves monthly cash flow. Rule of thumb: if you don't need the cash flow relief, reduce tenure. If you're under monthly budget pressure, reduce EMI.
For floating rate home loans: RBI has banned prepayment charges since 2012. For fixed rate loans: banks may charge 1-3% of prepayment amount. For personal and car loans: check your loan agreement — charges vary.
Early in the loan tenure — when outstanding principal is highest and more interest is yet to be charged. A prepayment in year 2 saves far more than the same amount in year 15.