Loan prepayment calculator
How much a part-payment on your home, car or personal loan saves, and whether to cut the tenure or the EMI. Enter what you still owe, the rate and the months left, then add one-time, monthly or yearly prepayments.
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Your figures
Results
Interest saved, if you reduce the tenure
₹8,26,861
and the loan ends 5 years sooner
- Interest saved, if you reduce the EMI
- ₹4,22,770
- EMI after prepaying, if you reduce it
- ₹6,557.79
- Your EMI now
- ₹24,986.22
- You prepay in all
- ₹6,72,311
Reducing the tenure saves more interest. Reducing the EMI eases each month instead. The table below has both side by side.
Fix the figure marked above, and the results will follow.
The link keeps your figures after its # sign, a part browsers never send to a server.
Reduce tenure or reduce EMI
| No prepayment | Reduce tenure | Reduce EMI | |
|---|---|---|---|
| EMI | ₹24,986.22 | ₹24,986.22 | ₹24,986.22 → ₹6,557.79 |
| Time to repay | 15 years | 10 years | 15 years |
| Loan ends | after 15 years | after 10 years | after 15 years |
| Total interest | ₹19,97,518 | ₹11,70,657 | ₹15,74,749 |
| Interest saved | – | ₹8,26,861 | ₹4,22,770 |
| Prepaid | ₹0 | ₹6,72,311 | ₹9,00,000 |
Loan balance over time
- No prepayment
- Reduce tenure
- Reduce EMI
How this is calculated
First, the EMI on what you owe now, over the months left:
EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1)
where P is the balance, r is the monthly rate (the yearly rate ÷ 12 ÷ 100) and n is the months left. Then the loan is followed month by month three ways: with no prepayment, with your prepayments reducing the tenure, and with your prepayments reducing the EMI.
- Reduce tenure: the EMI stays the same. Each prepayment comes straight off the balance, so less interest builds up and the loan ends sooner.
- Reduce EMI: after each prepayment, the EMI is worked out again for the same end date, on the smaller balance.
- Timing: a prepayment is paid just after the EMI you pick. “After EMI no. 1” means next month’s EMI is the first one on the smaller balance. A yearly prepayment repeats every 12 EMIs from there.
- Rounding: amounts are kept in paise, as a bank keeps them, and rounded only when shown.
- Not included: prepayment charges. Lenders in India generally can’t charge them on floating-rate loans to individuals, but fixed-rate loans can have them, so check your loan agreement.
Questions
Which saves more, reducing the tenure or the EMI?
Reducing the tenure, almost always. With the same EMI, more of every payment goes to principal after a prepayment, so the balance falls faster and less interest builds up. Reducing the EMI saves less, but leaves you more money each month.
Is it worth prepaying early in the loan?
Usually, yes. Interest is charged on what you still owe, and the balance is biggest at the start, so an early prepayment cuts more interest than the same amount near the end. Compare it with keeping an emergency fund and with what the money could earn elsewhere, after tax.
Will my bank reduce the tenure or the EMI?
It depends on the lender. Many reduce the tenure unless you ask for a lower EMI. Ask your bank for a new schedule after a prepayment, and check it against this one.
Should I prepay or invest?
Prepaying gives a sure return equal to your loan’s interest rate. Investing may earn more, or less. Many people do both, and keep an emergency fund first. This calculator shows what prepaying saves, so you can weigh it.
Quilleaf shows what prepaying saves on your own loan
Quilleaf is a free app for Android that keeps your money ledger on your phone, with no sign-up. Track your home, car or personal loan in it, and see your interest paid so far and this financial year, the months left and your debt-free date.
- What if you prepay? shows the interest you’d save.
- The Debt plan puts your cards, loans and money you owe side by side: Avalanche, Snowball or minimum only, with an extra amount each month.
More calculators
EMI calculator
Your monthly EMI, the total interest, and the full schedule, with prepayments.
Credit card interest calculator
How long paying only the minimum due takes, and what it costs.
Emergency fund calculator
How much to keep aside for a rainy day, and how long it takes to get there.
These figures are estimates to help you plan, not financial advice. Banks, lenders and fund houses round and time things their own way, and rates change: check with them before you decide.