FREE CALCULATOR
Home Loan Prepayment Calculator
Find out what a part-payment is worth: the interest it saves, the months it removes, and whether to cut your EMI or your tenure. The prepayment panel is already switched on below.
- Model a one-time lump sum, a yearly top-up or a monthly extra payment, starting in any month.
- Floating-rate home loans to individuals carry no prepayment or foreclosure charge under RBI rules.
- See interest saved and the new end date side by side with the original schedule.
₹50.00 L
20 yrs · 240 mo
1 yr
30 yrs
These are what separate the rate you are quoted from the rate you actually pay. Every figure here feeds the effective APR.
₹25,000 fee + ₹4,500 GST = ₹29,500
Optional. Typically ₹30,000–₹2,00,000, financed into the loan.
No loan interest deduction is available under the New Regime, so tax savings are shown as zero.
Live Cost Breakdown
Monthly instalment (EMI)
₹43,391/mo
for 196 months (16y 4m) · 44 months saved
Effective APR
8.59%
9 bps above the 8.5% quoted
Where every ₹100 goes
Total outflow ₹92.95 L
Principal
- 53.8%₹50.00 L
Interest
- 45.9%₹42.66 L
Fees & insurance
- 0.3%₹29,500
You repay ₹1.86 for every ₹1 you borrow. Until month 110 (9y 2m) more than half of each EMI is interest — prepaying before then is worth several times what it is worth after.
Total interest
₹42.66 L
over 16y 4m
Upfront charges
₹29,500
paid before disbursal
Tax saved
₹0
New Regime — no deduction
Real cost
₹58.98 L
in today's ₹ at 6% inflation
Your prepayment plan
This plan saves ₹11.48 L in interest and clears the loan 3y 8m early. The EMI, chart and totals above already include it.
Principal
Interest
Prepayment
Estimates for a home loan, for illustration only. Actual EMI, charges and tax treatment depend on your lender's sanction terms and your own tax position. Confirm the figures on your Key Facts Statement before you sign.
How Is EMI Calculated?
Every loan EMI in India is calculated using the reducing-balance method. The formula is:
EMI = P × r × (1 + r)ⁿ ÷ [(1 + r)ⁿ – 1]
- PPrincipal — the loan amount you borrow
- rMonthly interest rate — annual rate ÷ 12 ÷ 100 (e.g. 8.5% p.a. → 0.007083 per month)
- nTenure in months — e.g. 20 years = 240 months
Worked example: ₹50 lakh at 8.5% for 20 years — r = 0.007083, n = 240. EMI = 50,00,000 × 0.007083 × (1.007083)²⁴⁰ ÷ [(1.007083)²⁴⁰ – 1] ≈ ₹43,390/month. Total interest paid over 20 years ≈ ₹55.3 lakh — more than the original principal.
What a Prepayment Saves
| Prepaid from month 13 | Interest saved | Loan ends earlier by |
|---|---|---|
| ₹1 lakh once | ₹3,79,012 | 11 mo |
| ₹2 lakh once | ₹7,23,361 | 1 yr 9 mo |
| ₹5 lakh once | ₹15,91,162 | 4 yr |
| ₹1 lakh every year | ₹18,38,004 | 6 yr |
₹50 lakh home loan at 8.5% for 20 years (EMI ₹43,391). Prepayments cut the tenure and keep the EMI unchanged.
What Decides How Much You Save
Timing — early in the loan most of each EMI is interest, so a rupee prepaid in year 2 saves far more than one prepaid in year 15.
Tenure or EMI — keeping the EMI and cutting the tenure saves the most interest. Lowering the EMI instead frees cash each month but saves less.
Your rate — the higher your rate, the more each prepaid rupee saves.
Rate type — RBI bars prepayment and foreclosure charges on floating-rate loans to individuals for non-business use. Fixed-rate loans can still charge, often 2–3%.
Tax — under the old regime, home loan interest is deductible up to ₹2 lakh a year. Prepaying lowers your interest, so it can shrink that deduction.
Prepaying Well
Prepay in the first third of the tenure, when the interest share of each EMI is highest.
Ask the bank to reduce the tenure, not the EMI. Many banks do this by default, but confirm it in writing.
Keep six months of EMIs and expenses as an emergency fund before you prepay. Prepaid money is hard to get back.
Get an updated amortisation schedule after every part-payment and check the closing balance moved by the full amount.
Frequently Asked Questions
Is there a penalty for prepaying a home loan?
Not on a floating-rate home loan taken by an individual: RBI bars banks and NBFCs from charging prepayment or foreclosure fees on these. Fixed-rate and business loans can still carry a charge, so check your sanction letter.
How much does a ₹5 lakh prepayment save on a ₹50 lakh home loan?
On ₹50 lakh at 8.5% over 20 years, a one-time ₹5 lakh prepayment in month 13 saves about ₹15,91,162 in interest and ends the loan 4 yr earlier, if you keep the EMI unchanged.
Should I reduce my EMI or my tenure after a prepayment?
Reducing the tenure saves more interest, because the same EMI keeps paying down principal faster. Reduce the EMI only if you need the monthly cash flow, for example after a rate rise.
When is the best time to prepay a home loan?
As early as you can. In the first years of a 20-year loan, most of each EMI is interest, so every rupee of principal you remove then avoids interest for the longest time.
Should I prepay my home loan or invest the money?
Prepaying earns you your loan rate, risk-free and after tax. Investing makes sense only if you expect a higher after-tax return and can stomach the risk. Many borrowers split the difference: keep an emergency fund, then prepay a fixed amount each year.