How to use this home loan prepayment calculator
- Outstanding loan balance: the principal you still owe today, from your latest loan statement or your bank’s app, not the amount originally sanctioned.
- Interest rate and Remaining tenure: the years left on the loan, not its original tenure. The hint under the balance shows the EMI we calculate, so you can check it against your statement.
- Part-prepayment each month: the amount you would pay on top of your EMI every month. Drag the slider to see the saving grow.
- Open "More options" to add a One-off part-prepayment, such as an annual bonus or a maturing deposit, and Paid in year, when you would make it.
The results compare your loan as it stands with the same loan after your part-prepayments: the interest saved, the EMIs you no longer pay, the new total interest and your monthly outgo. The chart shows both balances, and the year-by-year table can be downloaded.
How part-prepayment cuts your interest
Each month, interest is charged on the balance you owe. Your EMI pays that interest first, and the rest reduces the principal. A part-prepayment skips the interest step: every rupee goes to principal. Next month’s interest is smaller, more of the same EMI goes to principal, and the loan finishes early.
Interest this month = B × r · New balance = B − (EMI − interest) − part-prepayment B is the outstanding balance at the start of the month and r the monthly rate (annual rate ÷ 12 ÷ 100).
The calculator repeats this month by month until the balance reaches zero. Your EMI does not change; what changes is how many of them you pay.
Worked example
You owe ₹50 lakh at 8.5% with 15 years left. Your EMI is ₹49,236.98, and if you change nothing you will pay ₹38,62,656 of interest over the remaining 180 EMIs.
Add a part-prepayment of ₹5,000 a month, about 10% of the EMI. The loan now ends after 150 EMIs, 2 years and 6 months sooner. Total interest falls to ₹31,33,032, a saving of ₹7,29,624. Your part-prepayments add up to ₹7,47,485, so every rupee you prepay saves about ₹0.98 of interest.
Double it to ₹10,000 a month and you save ₹12,17,058 and finish 4 years and 2 months early.
Interest saved by monthly part-prepayment
The same ₹50 lakh loan at 8.5% with 15 years left:
| Part-prepayment each month | Interest saved | Time saved | EMIs saved |
|---|---|---|---|
| ₹2,000 | ₹3,32,023 | 1 yr 1 mo | 13 |
| ₹5,000 | ₹7,29,624 | 2 yrs 6 mos | 30 |
| ₹10,000 | ₹12,17,058 | 4 yrs 2 mos | 50 |
| ₹20,000 | ₹18,34,556 | 6 yrs 6 mos | 78 |
Even ₹2,000 a month takes more than a year off the loan. To model a part-prepayment on a new loan from day one, use the home loan EMI calculator.
A lump sum: the earlier, the better
A rupee prepaid early saves more, because it stops interest for longer. Here is a single ₹5 lakh part-prepayment on the same loan, with nothing extra each month, depending on when you pay it:
| Paid in | Interest saved | Time saved | Saved per ₹1 prepaid |
|---|---|---|---|
| Year 1 | ₹10,81,424 | 2 yrs 8 mos | ₹2.16 |
| Year 5 | ₹6,62,432 | 1 yr 11 mos | ₹1.32 |
| Year 10 | ₹2,82,615 | 1 yr 3 mos | ₹0.57 |
"Saved per ₹1" is the interest that rupee would have collected over the rest of the loan, not a return on top of getting it back. The yearly return is simply your interest rate: prepaying an 8.5% loan is like earning a guaranteed 8.5% on that money. You can combine both kinds: ₹5,000 a month plus ₹2 lakh in year 1 saves ₹10,83,482 and finishes 3 years and 4 months sooner.
Prepayment charges under RBI rules
Under RBI rules, lenders cannot charge prepayment or foreclosure fees on floating-rate loans taken by individuals for non-business purposes. The current rules cover loans sanctioned or renewed from 1 January 2026, and earlier rules already barred these charges on floating-rate home loans. So if you took a floating-rate home loan as an individual, part-prepaying it or closing it early carries no fee.
A fixed-rate loan may carry a charge, so read your loan agreement before you prepay. If the charge is a small share of what you would save, prepaying can still be worth it.
Before you prepay
- Keep an emergency fund. Money you prepay is tied up in your home, so hold a few months of expenses aside first.
- Clear dearer debt first. Credit card interest often runs around 3–3.75% a month, roughly 36–45% a year, far more than a home loan. The debt payoff calculator helps you put your loans in order.
- Allow for tax. If you claim home loan interest under the old tax regime, prepaying lowers the interest you can claim, so your after-tax saving is a little smaller than shown.
- Check your rate. If another lender offers a lower rate, switching cuts the interest on your whole balance. See what it would save with the home loan balance transfer calculator.
Frequently asked questions
Are there charges for prepaying a home loan?
How much interest do I save by prepaying ₹1 lakh?
Should I reduce my EMI or my tenure after a part-prepayment?
Is it better to prepay my home loan or invest the money?
Can I make a part-prepayment every month?
Does prepaying affect my home loan tax benefit?
Sources and further reading
Independent, official guidance on this topic. Rules differ by country, so check the regulator where you live.
- Reserve Bank of India: regulations, notifications and consumer awareness · Reserve Bank of India
This calculator gives estimates for education and planning. It is not financial advice, and your lender's figures may differ. See how we calculate.