A loan prepayment calculator helps you understand how an additional payment towards your outstanding loan can reduce future interest, monthly EMI or remaining loan tenure. Enter your outstanding principal, current interest rate, remaining tenure and proposed prepayment amount. The calculator will compare your existing repayment schedule with the revised schedule after prepayment.
The calculator works for home loans, personal loans, car loans, education loans and loans against property. Results are indicative and may differ from your lender's final repayment schedule.
Loan prepayment means paying an additional amount towards the outstanding principal before it becomes due under the regular repayment schedule. A prepayment may be:
When a part-prepayment is made, the lender normally adjusts the repayment schedule in one of two ways:
Most loans follow the reducing-balance method. Interest for each month is calculated on the principal outstanding at that time. When you make a prepayment, the amount is adjusted against the principal. Future interest is then calculated on a smaller balance. This can reduce the total interest paid over the remaining tenure.
The calculator first estimates your current EMI and remaining interest. It then deducts the prepayment amount from the outstanding principal and generates a revised repayment schedule using the EMI formula:
Prepayment usually has a stronger impact during the earlier years of a loan. At the beginning of a long-tenure loan, a larger portion of each EMI is allocated towards interest. Prepayment can be particularly useful when:
| Your Priority | Better Option |
|---|---|
| Maximum interest saving | Keep EMI unchanged and reduce tenure |
| Become debt-free sooner | Reduce tenure |
| Lower monthly financial pressure | Reduce EMI |
| Income has fallen | Reduce EMI |
| Preparing for retirement | Reducing tenure may be useful |
Note: Reducing tenure usually produces greater savings because the outstanding amount remains unpaid for fewer months. Reducing EMI provides immediate monthly relief but keeps the loan running for the original period.
Under the Reserve Bank of India's 2025 Directions, regulated lenders cannot levy prepayment charges on floating-rate loans granted to individuals for non-business purposes when the loan was sanctioned or renewed on or after January 1, 2026. This applies to part-prepayment and full prepayment, irrespective of the source of funds, and without a minimum lock-in period.
For other loans, including certain fixed-rate and business-purpose loans, charges may still apply according to the lender's approved policy. Always check your sanction letter, loan agreement and Key Facts Statement for exact terms.
No. Part-payment reduces a portion of the outstanding principal, while foreclosure involves paying the complete outstanding amount and closing the loan.
The saving depends on the outstanding principal, interest rate, remaining tenure, timing of the payment and applicable charges. Prepayments made earlier generally produce higher savings.
For floating-rate loans granted to individuals for non-business purposes and sanctioned or renewed from January 1, 2026, RBI directions prohibit regulated lenders from charging prepayment fees. Different rules may apply to other loans. Check with your lender.
Compare the effective post-tax cost of the loan with the expected post-tax investment return. Also consider risk, liquidity, remaining tenure and whether prepayment charges apply.
A properly completed prepayment generally does not negatively affect the credit score. After full foreclosure, verify that the lender reports the account as "closed," not "settled."
The results are estimates. Actual figures may vary because of EMI dates, daily interest calculations, rate revisions, rounding methods and lender-specific charges.