Loan prepayment calculator
See how much interest a part-payment could save, and whether a lower EMI or a shorter loan saves more.
A loan prepayment calculator estimates how much interest a part-payment could save, and whether a lower EMI or a shorter loan saves more. Prepaying ₹1,00,000 after a year on ₹10,00,000 at 9% for 20 years could save ₹3,53,990 if you cut the tenure, or ₹1,09,052 if you cut the EMI.
Interest you could save
₹3,53,990 by reducing the tenure
Rupees three lakh fifty-three thousand nine hundred ninety only
Reduce EMI
₹1,09,052
New EMI ₹8,080 for 228 more months
Saves more
Reduce tenure
₹3,53,990
Same EMI for 178 more months, 50 fewer
Saves more
- EMI now
- ₹8,997.26
- Balance after 12 EMIs
- ₹9,81,273
- Interest without prepayment
- ₹11,59,342
Reducing the tenure saves ₹2,44,938 more interest. Reducing the EMI eases your monthly budget instead.
Estimate at a fixed 9% a year. Charges and rate changes are not included. Nothing you type is stored.
How to use this loan prepayment calculator
- Enter your loan amount, the yearly interest rate and the full tenure, as in your loan agreement.
- Enter how many EMIs you have already paid. The calculator works out the balance you still owe.
- Enter the lump sum you plan to prepay. Choose "Every year" if you plan to repeat it after every 12 EMIs.
- Compare the two cards. "Reduce EMI" keeps your end date and lowers the EMI. "Reduce tenure" keeps your EMI and ends the loan sooner.
Loan prepayment formula
B = P × (1 + i)k − EMI × [(1 + i)k − 1] ÷ i
New EMI = (B − X) × i × (1 + i)r ÷ [(1 + i)r − 1]
- P
- Principal: the loan amount you borrowed.
- i
- Monthly interest rate: the yearly rate ÷ 12 ÷ 100. For 9% a year, i = 0.0075.
- k
- EMIs already paid.
- B
- Balance you still owe after k EMIs.
- X
- Your prepayment. All of it goes to principal.
- r
- EMIs left on the original schedule.
To reduce the tenure instead, the EMI stays the same. The calculator then runs the loan month by month until the smaller balance is paid off. The last EMI is usually smaller than the rest. Interest saved is the interest on the original loan minus the interest after the prepayment.
Worked example
You borrowed ₹10,00,000 at 9% a year for 20 years (240 EMIs). Your EMI is ₹8,997.26. After 12 EMIs you still owe ₹9,81,272.90. You prepay ₹1,00,000, so the balance drops to ₹8,81,272.90.
- Reduce EMI: new EMI
- ₹8,080.36 for 228 months
- Reduce EMI: total interest
- ₹10,50,290
- Reduce EMI: interest saved
- ₹1,09,052
- Reduce tenure: EMIs left
- 178 (50 fewer; last one ₹4,869.99)
- Reduce tenure: total interest
- ₹8,05,352
- Reduce tenure: interest saved
- ₹3,53,990
Without the prepayment, the loan costs ₹11,59,342 in interest. Keeping the EMI and cutting the tenure saves more than three times as much interest here.
Reduce EMI vs reduce tenure: common cases
All rows use a ₹10 lakh loan at 9% a year for 20 years, with the prepayment made after 12 EMIs.
| Prepayment | Reduce EMI: saved | Reduce tenure: saved | EMIs cut |
|---|---|---|---|
| ₹50,000 once | ₹54,526 | ₹1,98,262 | 27 |
| ₹1 lakh once | ₹1,09,052 | ₹3,53,990 | 50 |
| ₹2 lakh once | ₹2,18,105 | ₹5,82,915 | 87 |
| ₹1 lakh every year | ₹7,32,626 | ₹8,08,744 | 156 |
With ₹1 lakh every year and the tenure cut, the loan ends after 84 EMIs instead of 240. You prepay ₹6,00,000 in all.
Does it matter when you prepay?
Yes. Early EMIs are mostly interest, so a prepayment early in the loan stops more future interest. Here is the same ₹1 lakh prepayment on the same loan, with the tenure cut:
- After 12 EMIs
- ₹3,53,990 saved
- After 60 EMIs
- ₹2,34,240 saved
- After 120 EMIs
- ₹1,23,884 saved
On a floating-rate EMI loan, RBI rules also say that at a rate reset, lenders must let you choose a higher EMI, a longer tenure or both, and allow prepayment at any time. Source: RBI notification on reset of floating interest rate on EMI loans.
Loan prepayment calculator FAQs
Should I reduce the EMI or the tenure?
Reducing the tenure usually saves more interest, because you stop paying interest sooner. Reducing the EMI lowers your monthly outgo, which helps if your budget is tight. The two cards above show both for your numbers.
Is there a penalty for prepaying a floating-rate loan?
For a floating-rate loan taken by an individual for a non-business purpose, RBI rules bar prepayment charges. Loans sanctioned or renewed on or after 1 January 2026 are covered by the 2025 Directions, and earlier circulars covered older ones. For fixed-rate and business loans, check your lender's policy.
Should I prepay my loan or invest the money?
Prepaying saves interest at your loan rate, with no market risk. Investing could earn more or less than that, and returns are not guaranteed. Keep an emergency fund first. This calculator shows only the interest you save; it is not advice on what to do.
How often should I prepay?
Any amount helps, and earlier helps most. A yearly prepayment, such as part of a bonus, adds up quickly. Choose "Every year" above to see the effect. Check with your lender for any minimum prepayment amount.
Does my lender recalculate the EMI or the tenure by default?
It depends on the lender. Ask which one they apply, tell them in writing which you want, and ask for the new repayment schedule.
Why can my lender's figures differ?
Your lender may round differently or apply the prepayment on a different date from the one assumed here. A floating rate can also change during the loan. Treat this as a close estimate and check your new schedule.
Is my data saved?
No. Everything is calculated in your browser. Nothing you type is sent to us or stored. The only place your numbers go is the link you choose to copy or share.
For education only. This is not financial or legal advice. Your lender's figures can differ because of fees, rounding, payment dates and rate changes. Check your loan agreement and ask your lender before you prepay.