How to use the loan prepayment calculator
- Enter the Outstanding loan, the amount you still owe today.
- Enter the Interest rate (per year).
- Enter the Remaining tenure in years.
- Enter the Extra payment every month you plan to add to your EMI.
- Choose your currency, then read the interest saved, how much the tenure is cut, the new tenure and your current EMI. The chart compares the balance with and without the extra payment.
What it does and when to use it
A long loan quietly costs a lot in interest. On a 20-year home loan, total interest can be larger than the amount borrowed. Paying a little extra every month is one of the simplest ways to cut that cost, and this calculator shows exactly how much it helps.
Use it to:
- Decide how much extra to pay each month.
- See how a raise or a bonus, put towards the loan, would change the end date.
- Compare a smaller and a larger prepayment side by side.
- Plan around a target, such as clearing a home loan before retirement.
It works for home, car, education and personal loans with a fixed monthly payment. To see a full payment schedule, open the Amortization Schedule. For a new home loan, start with the Home Loan EMI Calculator, and for a vehicle, the Car Loan Calculator.
How it works
- The tool works out your current EMI with the standard formula, EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1), where r = yearly rate ÷ 12 ÷ 100 and n = remaining months.
- It builds two schedules. Each month, interest = balance × r, and the rest of the payment reduces the balance.
- In the second schedule, your extra payment is added to the EMI and goes entirely to the balance.
- Interest saved = total interest without prepayment − total interest with prepayment. The tenure cut is the difference in the number of months.
As the CFPB puts it, the quicker you pay down the principal, the less interest you pay. The calculation runs in your browser.
Worked examples
₹30 lakh at 8.5% with 20 years left, paying ₹5,000 extra a month. The current EMI is ₹26,034.70. Without prepayment, total interest is ₹32,48,327.28. With ₹5,000 extra, it falls to ₹20,75,271.41. Interest saved: ₹11,73,055.87, and the tenure is cut by 6 years 4 months, to 13 years 8 months.
The same loan, paying ₹10,000 extra. Interest saved rises to ₹17,00,093.61, and the new tenure is 10 years 7 months. Doubling the extra payment does not double the savings, but it takes the loan close to half its original length.
Limits and tips
- The interest rate is assumed to stay the same. On a floating-rate loan, it will change over time.
- Any prepayment charges, and the effect on tax benefits, are not included.
- Ask your lender how extra payments are applied. Make sure they reduce the principal and are not just held as advance EMIs.
- Prepaying early in the loan saves the most, because that is when the balance and the interest are highest.
Frequently asked questions
How does prepaying save interest?
Does this reduce my EMI or my tenure?
Will my bank charge a prepayment penalty?
Is it better to prepay or invest the money?
What if I make one lump-sum payment instead?
Sources
- Reserve Bank of India (Commercial Banks – Responsible Business Conduct) Directions, 2025, as issued 28 November 2025 — paras 352–353 (pre-payment charges) — Reserve Bank of India, accessed 2026-10-13
- Reserve Bank of India (Pre-payment Charges on Loans) Directions, 2025 (2 July 2025) — where the rule was first issued; since consolidated into the conduct directions — Reserve Bank of India, accessed 2026-10-13
- Is it better to pay off the interest or principal on my auto loan? — Consumer Financial Protection Bureau, accessed 2026-10-03
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