GreenFunds
Free tool

Loan Prepayment Calculator

See how much interest a one-time part-prepayment saves, and compare cutting your tenure with lowering your EMI. Every figure here is an illustration at a fixed rate.

Interest you save ₹0
EMI after prepaying ₹0
EMIs left 0
Total interest, without and with prepaying ₹0

This is an illustration at one fixed rate for the whole loan, with no prepayment charge. Real loans can have floating rates, charges on fixed-rate loans and lender-specific rules on how a prepayment is applied. Check your loan statement after prepaying.

How this is calculated

The calculator runs your loan month by month on the reducing-balance method. After the EMI number you choose, the prepayment comes off the balance you still owe. If you keep the same EMI, the smaller balance is paid off sooner. If you keep the same end date, the EMI is worked out again on the smaller balance for the months left. The saving is the original total interest minus the new total.

A worked example

Illustration: a 30 lakh rupee home loan at 8.5% a year for 20 years. The EMI is about ₹26,035 and the total interest about ₹32.48 lakh.

  • Prepay 5 lakh after 3 years and keep the EMI: the 204 EMIs left fall to 140, and you save about ₹11.73 lakh of interest.
  • Prepay 5 lakh after 3 years and keep the end date: the EMI falls to about ₹21,393, and you save about ₹4.47 lakh.
  • Prepay the same 5 lakh after 10 years and keep the EMI: you save about ₹5.17 lakh, less than half as much.
  • Even 1 lakh after the first year, keeping the EMI, saves about ₹3.70 lakh and ends the loan 18 months early.

Before you prepay, keep an emergency fund aside and compare the loan rate with what the money could safely earn. Our guide on whether to prepay a loan walks through the trade-off.

Read next

Questions people ask

How much interest will I save by prepaying my loan?

It depends on how much you prepay, how early, and whether you keep the EMI or the tenure. In the illustration on this page, prepaying 5 lakh rupees after 3 years on a 30 lakh home loan at 8.5% for 20 years saves about ₹11.73 lakh of interest if you keep the same EMI, or about ₹4.47 lakh if you lower the EMI instead.

Should I reduce the EMI or the tenure after a prepayment?

Keeping the EMI and cutting the tenure saves far more interest, because the loan ends sooner. Lowering the EMI saves less but frees up monthly cash. If your budget is comfortable, cutting the tenure is usually the cheaper choice. Ask your lender which options it offers.

Is it better to prepay early in the loan?

Yes. Interest is charged on the balance you owe, and the balance is highest in the early years. In the illustration on this page, the same 5 lakh prepayment saves about ₹11.73 lakh after 3 years but about ₹5.17 lakh after 10 years.

Will my lender charge for prepayment?

Under RBI directions for loans sanctioned or renewed from 1 January 2026, lenders cannot charge individuals for prepaying a floating-rate loan taken for non-business use, in part or in full. On fixed-rate loans, the lender may charge as per its policy, if the charge is disclosed in the Key Facts Statement. This calculator does not include any charge.

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