Loan Prepayment Calculator: Reduce EMI or Reduce Tenure?
Enter your loan, the part-payment and after how many EMIs you will pay it. Compare cutting the tenure with cutting the EMI, and see the balance year by year.
- Nothing you type is stored
- Free
- No signup
Interest saved
₹6,22,877
- New tenure
- 209 months
- EMIs saved
- 31 months
- Interest without part-payment
- ₹32,48,327
- Interest with part-payment
- ₹26,25,451
Total part-payments: ₹2,00,000. Floating-rate home loans to individuals carry no prepayment charge (RBI); check your loan terms for others.
Balance year by year
| Year | Without part-payment | With part-payment |
|---|---|---|
| 1 | ₹29,40,293 | ₹29,40,293 |
| 2 | ₹28,75,309 | ₹26,75,309 |
| 3 | ₹28,04,580 | ₹25,86,902 |
| 4 | ₹27,27,600 | ₹24,90,681 |
| 5 | ₹26,43,815 | ₹23,85,955 |
| 6 | ₹25,52,625 | ₹22,71,972 |
| 7 | ₹24,53,374 | ₹21,47,914 |
| 8 | ₹23,45,351 | ₹20,12,891 |
| 9 | ₹22,27,779 | ₹18,65,932 |
| 10 | ₹20,99,815 | ₹17,05,984 |
| 11 | ₹19,60,540 | ₹15,31,898 |
| 12 | ₹18,08,954 | ₹13,42,424 |
| 13 | ₹16,43,969 | ₹11,36,203 |
| 14 | ₹14,64,402 | ₹9,11,753 |
| 15 | ₹12,68,962 | ₹6,67,465 |
| 16 | ₹10,56,247 | ₹4,01,583 |
| 17 | ₹8,24,730 | ₹1,12,199 |
| 18 | ₹5,72,749 | ₹0 |
| 19 | ₹2,98,495 | ₹0 |
| 20 | ₹0 | ₹0 |
How to use
- Enter the original loan amount, rate and tenure.
- Enter the part-payment and the EMI number after which you will pay it.
- Switch between "Cut tenure" and "Cut EMI", and tick the yearly option if you plan to repeat it.
Good to know
A part-payment goes straight to the principal, so every later EMI carries less interest. Keeping the EMI the same and finishing early (cut tenure) almost always saves more interest than lowering the EMI, because the extra EMI money keeps paying down principal.
The earlier you prepay, the bigger the saving: in the first years most of each EMI is interest. A yearly part-payment, such as from a bonus, can take many years off a 20-year home loan.
RBI rules do not allow prepayment charges on floating-rate loans taken by individuals for non-business purposes. Fixed-rate loans and business loans may still carry a charge. Keep an emergency fund before prepaying, and compare the loan rate with what your money could earn safely after tax.
Questions
Is it better to reduce EMI or tenure?
Reducing the tenure saves more interest. Reduce the EMI only if you need the lower monthly outgo.
When is the best time to prepay?
As early as possible. Prepayments in the first third of the loan save the most interest.
Will my bank charge a prepayment penalty?
Not on floating-rate loans to individuals for personal use. Check your sanction letter for fixed-rate or business loans.
Should I prepay or invest?
Prepaying gives a guaranteed saving equal to your loan rate. Investing may earn more but with risk. Many people do both and keep an emergency fund first.
Does it account for tax benefits?
No. If you claim home loan interest under the old tax regime, your effective saving may be a little lower.