Original Total Interest
₹ 53,85,420
New Total Interest with Prepayment
₹ 31,45,210
Tenure Reduced By
6 Years 4 Months
Total Interest Saved
₹ 22,40,210
About the Loan Prepayment Calculator
Our free Loan Prepayment Calculator helps borrowers evaluate how making regular extra payments towards their principal balance can significantly reduce their loan tenure and overall interest outlays. Whether you are paying down a home loan, car loan, or personal loan, prepayments target the principal directly, reducing the base on which future interest is compounded.
How Loan Prepayments Save Money
When you make regular monthly or periodic lump-sum prepayments:
- Principal Reduction: Extra payments bypass regular interest charges and chip away directly at your outstanding principal.
- Tenure Compression: By lowering the principal faster, your remaining loan term shortens considerably, eliminating years of future interest charges.
How to Use the Calculator
Simply enter your loan details or adjust the interactive range sliders:
- Outstanding Loan Amount: The principal balance remaining on your loan.
- Interest Rate: The annual percentage rate charged by your lender.
- Remaining Tenure: The time left on your loan repayment schedule.
- Extra Prepayment: The additional amount you plan to pay toward the principal each month.
Click the Calculate button to instantly view your original total interest, new interest burden, tenure reduction, and total interest saved.
Frequently Asked Questions (FAQs)
Should I prepay my loan or invest surplus funds elsewhere?
This depends on your loan interest rate versus your expected investment returns. If your loan interest rate is higher than what you can reliably earn after taxes in safe investments, prepaying is generally more financially advantageous.
Are there prepayment penalties on loans in India?
Under RBI guidelines, floating-rate home loans and personal loans taken by individual borrowers do not attract any prepayment or foreclosure penalties. However, fixed-rate loans or loans taken by non-individuals may carry penalty charges.
Does prepayment reduce my monthly EMI or my tenure?
Most lenders automatically reduce your loan tenure while keeping your EMI constant when you make prepayments, which maximizes your interest savings. You can also request a lower EMI if cash flow relief is your primary goal.
