Loan Prepayment Calculator 2026

Calculate exact interest savings and tenure reduction when making lump-sum or recurring prepayments on home, car, or personal loans

Loan amount

₹

₹1.00 L₹5.00 Cr

Interest rate

5%20%

Tenure

Yrs

1 Yr30 Yrs

Prepayment frequency / mode

Select whether you want to make a single one-time lump sum prepayment or recurring prepayments (monthly, quarterly, or annual bonus).

Lump-sum amount

₹

₹10,000₹25.00 L

Payment timing (Month #)

1239

After the prepayment, reduce

Banks shorten the loan and keep the EMI unless you ask otherwise. Reducing the EMI keeps the end date and saves less interest.

Interest saved: ₹16.04 L; And you finish 4 years earlier.

Monthly EMI: ₹43,391
Total Extra Paid: ₹5.00 L

Baseline vs With Prepayment

Without prepayment

Tenure: 240 months
Total interest: ₹54.14 L
Total payment: ₹1.04 Cr

With prepayment

Tenure: 192 months
Total interest: ₹38.10 L
Total payment: ₹88.10 L

Total saved (interest + EMIs avoided): ₹16.04 L

Year-by-year breakdown

Show as

Year 1
EMI paid
₹5.21 L
Extra paid
₹5.00 L
Interest
₹4.21 L
Principal
₹6.00 L
Closing balance
₹44.00 L
Year 2
EMI paid
₹5.21 L
Extra paid
—
Interest
₹3.68 L
Principal
₹1.53 L
Closing balance
₹42.48 L
Year 3
EMI paid
₹5.21 L
Extra paid
—
Interest
₹3.55 L
Principal
₹1.66 L
Closing balance
₹40.82 L
Year 4
EMI paid
₹5.21 L
Extra paid
—
Interest
₹3.40 L
Principal
₹1.81 L
Closing balance
₹39.01 L
Year 5
EMI paid
₹5.21 L
Extra paid
—
Interest
₹3.24 L
Principal
₹1.97 L
Closing balance
₹37.05 L
Year 6
EMI paid
₹5.21 L
Extra paid
—
Interest
₹3.07 L
Principal
₹2.14 L
Closing balance
₹34.91 L
Year 7
EMI paid
₹5.21 L
Extra paid
—
Interest
₹2.88 L
Principal
₹2.33 L
Closing balance
₹32.58 L
Year 8
EMI paid
₹5.21 L
Extra paid
—
Interest
₹2.67 L
Principal
₹2.54 L
Closing balance
₹30.04 L
Year 9
EMI paid
₹5.21 L
Extra paid
—
Interest
₹2.45 L
Principal
₹2.76 L
Closing balance
₹27.28 L
Year 10
EMI paid
₹5.21 L
Extra paid
—
Interest
₹2.20 L
Principal
₹3.00 L
Closing balance
₹24.28 L
Year 11
EMI paid
₹5.21 L
Extra paid
—
Interest
₹1.94 L
Principal
₹3.27 L
Closing balance
₹21.01 L
Year 12
EMI paid
₹5.21 L
Extra paid
—
Interest
₹1.65 L
Principal
₹3.56 L
Closing balance
₹17.46 L
Year 13
EMI paid
₹5.21 L
Extra paid
—
Interest
₹1.34 L
Principal
₹3.87 L
Closing balance
₹13.58 L
Year 14
EMI paid
₹5.21 L
Extra paid
—
Interest
₹99,292
Principal
₹4.21 L
Closing balance
₹9.37 L
Year 15
EMI paid
₹5.21 L
Extra paid
—
Interest
₹62,044
Principal
₹4.59 L
Closing balance
₹4.78 L
Year 16
EMI paid
₹5.00 L
Extra paid
—
Interest
₹21,503
Principal
₹4.78 L
Closing balance
₹0

Year	EMI paid	Extra paid	Interest	Principal	Closing balance
Year 1	₹5.21 L	₹5.00 L	₹4.21 L	₹6.00 L	₹44.00 L
Year 2	₹5.21 L	—	₹3.68 L	₹1.53 L	₹42.48 L
Year 3	₹5.21 L	—	₹3.55 L	₹1.66 L	₹40.82 L
Year 4	₹5.21 L	—	₹3.40 L	₹1.81 L	₹39.01 L
Year 5	₹5.21 L	—	₹3.24 L	₹1.97 L	₹37.05 L
Year 6	₹5.21 L	—	₹3.07 L	₹2.14 L	₹34.91 L
Year 7	₹5.21 L	—	₹2.88 L	₹2.33 L	₹32.58 L
Year 8	₹5.21 L	—	₹2.67 L	₹2.54 L	₹30.04 L
Year 9	₹5.21 L	—	₹2.45 L	₹2.76 L	₹27.28 L
Year 10	₹5.21 L	—	₹2.20 L	₹3.00 L	₹24.28 L
Year 11	₹5.21 L	—	₹1.94 L	₹3.27 L	₹21.01 L
Year 12	₹5.21 L	—	₹1.65 L	₹3.56 L	₹17.46 L
Year 13	₹5.21 L	—	₹1.34 L	₹3.87 L	₹13.58 L
Year 14	₹5.21 L	—	₹99,292	₹4.21 L	₹9.37 L
Year 15	₹5.21 L	—	₹62,044	₹4.59 L	₹4.78 L
Year 16	₹5.00 L	—	₹21,503	₹4.78 L	₹0

Outstanding balance over time

Loan Prepayment Savings Formula & Live Calculation

Standard Formula

Interest Saved = Baseline Total Interest − Prepayment Total Interest

Live Calculation (Plugging Your Values)

Original Loan Principal (P):₹50.00 L

Annual Interest Rate (r):8.5% p.a.

Original Tenure (N):20 Years (240 Months)

Prepayment Amount (E):₹5.00 L

Tenure Reduced By (ΔN):48 Months

Substituted Equation:

Interest Saved = ₹54.14 L − ₹38.10 L

Total Net Interest Saved:₹16.04 L

Prepayment reduces the active principal balance directly. Because monthly interest is calculated as `Remaining Principal × (Annual Rate / 12)`, lowering principal shaves off interest for all future remaining EMI periods.

About the Loan Pre-payment Calculator

Prepaying a home or personal loan is one of the highest guaranteed-return financial moves available — every rupee of principal repaid early saves the loan's interest rate compounded for the remaining tenure. On a 20-year ₹50L home loan at 8.5%, a single ₹5L lump sum in year 1 typically saves ₹15L+ in interest and shaves 3+ years off the tenure. Prepaying usually costs nothing: under the RBI (Pre-payment Charges on Loans) Directions, 2025, a lender may not charge a pre-payment penalty on a floating-rate loan taken by an individual for a non-business purpose, sanctioned or renewed from 1 January 2026.

This calculator models the most common Indian repayment style: tenure reduction, where your EMI stays constant and the extra payment shortens the loan. RBI rules prohibit prepayment penalties on floating-rate home loans, so you can prepay any time. Compare a one-time bonus (Diwali / appraisal) against a recurring monthly, quarterly, or annual top-up to see which fits your cash flow.

How it Works

Loan amount, rate, tenure — your existing loan terms.
Prepayment frequency — One-time lump sum, Monthly extra, Quarterly top-up, or Yearly annual bonus.
Prepayment amount — extra rupees applied directly to principal.
Payment timing (Month #) — when the one-time lump sum lands (e.g. Month 12 = End of Year 1).

References

How these numbers are checked →

Loan Prepayment FAQs

Are there prepayment charges on home loans in India?

Under the RBI (Pre-payment Charges on Loans) Directions, 2025, no regulated lender may charge a pre-payment penalty on a floating-rate loan taken by an individual for a non-business purpose — home, education and personal loans alike. It applies to loans sanctioned or renewed from 1 January 2026, whether you repay in part or in full, and no minimum lock-in may be imposed. Fixed-rate loans are not covered.

Is it better to reduce EMI or reduce tenure when making a prepayment?

Reducing tenure saves significantly more interest than reducing EMI because keeping EMI constant continues paying down principal faster, dramatically shortening the compounding window.

When is the best time during the loan tenure to make a prepayment?

The earlier you prepay in your loan tenure, the more interest you save. In the initial years of a long-term loan, EMIs consist mostly of interest; prepaying early directly reduces the principal before heavy interest accrues.

How does lump-sum prepayment compare with monthly top-up prepayments?

A monthly top-up (e.g. paying ₹5,000 extra every month) steadily chips away at principal continuously, while a lump sum (e.g. ₹2 Lakhs once a year from bonus) provides a sharp drop in principal.

Does prepaying a loan affect Section 24(b) home loan tax deduction?

If your total annual home loan interest falls below ₹2,00,000 due to prepayment, your Section 24(b) deduction under the Old Tax Regime will equal your actual lower interest paid.

Do the RBI 2025 prepayment directions cover a loan I took in 2019?

The directions apply to loans sanctioned or renewed on or after 1 January 2026, so an older loan is not automatically covered by them. In practice an existing floating-rate home loan to an individual already enjoys the earlier RBI bar on foreclosure and prepayment charges, which has been in force for years. The 2025 directions widen that protection to other non-business loans to individuals and remove lock-ins. If your loan is older, check the sanction letter and ask the branch in writing what applies.

How do I confirm the bank applied my prepayment to principal and not to future EMIs?

Ask for a prepayment receipt or acknowledgement on the day you pay, and then download a fresh amortisation schedule and the loan statement about a week later. The outstanding principal should have fallen by the full amount paid, and the revised schedule should show either a shorter tenure or a lower EMI. If the bank has parked the money as advance EMI instead, the balance will be unchanged. State in writing that the payment is towards principal and that you want tenure reduced.

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