Home Loan Prepayment Calculator
Interest Saved · Months Cut · Revised Amortization
Enter your loan details and a prepayment — lump sum, monthly extra, or both — to instantly see how much interest you save, how many months you cut, and the complete revised repayment schedule.
Original Loan Details
Prepayment Details
Revised Amortization Schedule
How it works
EMI stays fixed. Each prepayment directly reduces the outstanding principal, so future interest is calculated on a lower balance — shortening the loan tenure.
Monthly EMI
₹ 43,391
unchanged after prepayment
You Save
29.6% of total interest eliminated
Before vs After
| Metric | Without | With Prepay |
|---|---|---|
| Tenure | 240 mo | 192 mo |
| Total Interest | ₹ 54,13,879 | ₹ 38,10,188 |
| Total Payable | ₹ 1,04,13,879 | ₹ 88,10,188 |
Interest Burden Comparison
How Does Home Loan Prepayment Work?
Every prepayment you make goes directly toward reducing the outstanding principal. Because future interest is calculated on the remaining balance, a lower principal means lower interest in every subsequent month — even though your EMI stays the same.
The result is that more of each subsequent EMI goes toward principal and less toward interest — a virtuous cycle that accelerates repayment and shortens your tenure. The earlier you prepay in the loan life, the larger the saving, because interest compounds on a smaller base for more months.
Under RBI guidelines, banks cannot charge a prepayment penalty on floating-rate home loans to individual borrowers. This makes prepayment a risk-free way to reduce your effective borrowing cost.
Frequently Asked Questions
How does prepayment reduce total interest?
Prepayment reduces the outstanding principal. Since interest each month = balance × monthly rate, a lower balance means lower interest every month from that point on. Your EMI stays the same but retires the loan sooner.
Is lump-sum or monthly extra payment better?
A single large lump sum made early saves the most in absolute rupees because it reduces the principal on which interest compounds for the longest time. Monthly extra payments are easier to sustain and still save significantly. Use the 'Both' tab to model a combination strategy.
Can the bank charge a prepayment penalty?
No — RBI prohibits prepayment or foreclosure charges on floating-rate home loans to individual borrowers. Fixed-rate loans may carry a 2–3% charge. Always confirm with your lender before prepaying.
When is the best time to prepay?
As early as possible. In the first few years of a home loan, over 70–80% of each EMI is interest. A prepayment in Year 1–3 saves substantially more than the same amount prepaid in Year 10, when the outstanding balance is already much lower.
Does my EMI change after prepayment?
By default, most Indian lenders reduce tenure and keep the EMI unchanged — which is the financially optimal choice. Some lenders offer the option to reduce EMI instead. This calculator assumes tenure reduction with a fixed EMI.
Should I prepay or invest the money?
If your home loan rate is 8.5% and you can claim Section 24(b) interest deduction, your effective after-tax cost is roughly 5.95% (30% tax bracket). If you can reliably earn more than this post-tax from investments, investing may be better. If not — or if the psychological benefit of a debt-free home matters — prepayment wins.