Finance
Home Loan Prepayment Calculator India
See what a one-time prepayment saves in interest, and how many months it cuts from your tenure.
Interactive tool
Home Loan Prepayment Calculator India
Interest saved
₹9,88,546
Months cut from tenure
50.39
Return on the prepayment
197.71%
Choice IQ readout
Keeping the EMI the same and shortening the tenure saves far more than reducing the EMI over the original tenure. Banks often default to the second. Ask for the first explicitly.
- Floating-rate home loans to individuals cannot carry prepayment penalties in India. Check your loan is floating.
- Compare this return against what the same money would earn invested. Prepaying is effectively a guaranteed, tax-free return at your loan rate.
- If you claim section 24 interest deduction, prepaying reduces that benefit slightly. Worth including for high earners.
Tool guide
How to use this home loan prepayment calculator india
Prepaying a home loan is effectively a guaranteed, tax-free return at your loan's interest rate, which is why it competes with investing more closely than people expect. This calculator holds your EMI constant and shortens the tenure, which saves far more than reducing the EMI - and is not what banks default to unless you ask.
Formula
EMI stays fixed. New tenure = log(EMI / (EMI - reduced balance x monthly rate)) / log(1 + monthly rate). Interest saved = interest without prepaying minus interest after.
Decision guide
When to use this home loan prepayment calculator india
Best use case
Use this page when you need a quick first estimate before comparing products, lenders, subscriptions, or buying options. It is built for practical planning, not final professional advice.
Inputs needed
Keep these numbers ready: Outstanding amount, Interest rate, Months remaining, Prepayment amount. If you are unsure, run one conservative estimate and one optimistic estimate.
Shareable result
After calculating, use the result link to save or share the same inputs. The URL parameters keep the calculation easy to revisit.
Common examples
Readers usually use this tool for deciding what to do with a bonus, comparing prepayment against investing, checking the return on paying down a loan. The best way to read the output is to compare scenarios instead of treating one result as a final answer.
How it works
Prepaying a home loan is effectively a guaranteed, tax-free return at your loan's interest rate, which is why it competes with investing more closely than people expect. This calculator holds your EMI constant and shortens the tenure, which saves far more than reducing the EMI - and is not what banks default to unless you ask.
Examples
- Deciding what to do with a bonus
- Comparing prepayment against investing
- Checking the return on paying down a loan
FAQ
Should I reduce my EMI or my tenure?
Tenure, almost always. Reducing the EMI keeps you paying interest for the full original term. Keeping the EMI and shortening the term is where nearly all the saving comes from, and banks often apply the first option by default.
Is prepaying better than investing the money?
Prepaying gives a guaranteed, tax-free return equal to your loan rate, typically 8% to 9%. Beating that reliably after tax requires equity risk. If you would otherwise leave the money in a deposit, prepaying usually wins.
Are there prepayment charges on a home loan?
Not on floating-rate loans to individual borrowers - the RBI prohibits them. Fixed-rate loans can carry charges, so check which type you have before making a large prepayment.
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