A home loan prepayment calculator shows how much you save by making extra payments. On Rs.50L at 8.5%/20yr, Rs.1L/year prepayment saves Rs.19.3L interest + 6.5 years.
Calculate Prepayment Savings
Enter loan details and prepayment amount to see savings.
How Prepayment Works
Extra payment above EMI goes directly to principal reduction.
| Option | What Happens | Savings |
|---|---|---|
| Reduce Tenure | EMI same, loan ends earlier | More (recommended) |
| Reduce EMI | Tenure same, EMI decreases | Less but better cash flow |
Saves 15-30% more total interest than EMI reduction.
Prepayment Impact: Real Numbers
Base: Rs.50L, 8.5%, 20yr. Total interest: Rs.54.1L
| Annual Prepayment | Interest Saved | Tenure Reduced |
|---|---|---|
| Rs.50K/year | Rs.11.8L | 3.8 years |
| Rs.1L/year | Rs.19.3L | 6.5 years |
| Rs.2L/year | Rs.27.6L | 8.9 years |
| Rs.5L/year | Rs.37.2L | 12.3 years |
Rs.1L prepayment in Year 1 saves ~Rs.4.5L interest. Same in Year 10 saves only ~Rs.1.5L.
RBI Prepayment Rules
| Loan Type | Penalty |
|---|---|
| Floating rate | ZERO (RBI mandate) |
| Fixed rate | 2-3% |
95%+ Indian home loans are floating. Prepay any amount, any time, zero penalty.
Prepay vs Invest?
| Factor | Prepay | Invest (SIP) |
|---|---|---|
| Return | 8.5% guaranteed (rate saved) | 10-12% (not guaranteed) |
| Risk | Zero | Market risk |
| Tax | Lose Sec 24 deduction | LTCG tax on gains |
Loan rate > 8% + low tax bracket = prepay. Loan rate < 8% + max Sec 24 = invest.
How to Use the Tool (Step by Step)
- 1
Enter Loan Details
Outstanding principal, rate, remaining tenure.
- 2
Add Prepayment
One-time or annual recurring amount.
- 3
Choose Reduction Type
Tenure (recommended) or EMI.
- 4
View Savings
Interest saved, new tenure, comparison.
Frequently Asked Questions
Is there penalty for prepayment?+−
Zero for floating rate (RBI mandate). Fixed rate: 2-3%. 95%+ loans are floating.
How much can I save?+−
Rs.50L at 8.5%/20yr: Rs.1L/year saves Rs.19.3L interest + 6.5 years.
Reduce tenure or EMI?+−
Tenure saves 15-30% more interest. EMI only if cash flow tight.
Best time to prepay?+−
As early as possible. Year 1 saves 3x more than Year 10.
Prepay or invest in SIP?+−
Prepay if rate > 8% and low tax bracket. Invest if you max Section 24.
Is this free and private?+−
Yes. Browser-based. No data sent anywhere.
Calculate Prepayment Savings
Enter loan details and prepayment amount to see savings.
Open Home Loan Prepayment Calculator ->Related Guides
EMI Calculator Guide
Understand the EMI formula, read an amortisation schedule, compare home/car/personal loan rates, and make smarter borrowing decisions.
EMI Prepayment Calculator Guide
Learn how partial prepayments reduce your loan tenure and interest burden — with worked examples for Indian home, car, and personal loans.
Loan Amortization Calculator Guide
Generate a complete loan amortization schedule showing principal vs interest split for each EMI. Understand how home loans, car loans, and personal loans are repaid over time.