Prepayment calculator

By Anchal Katyal · Written on Jun 23, 2026 · Verified on Oct 7, 2026

See how much interest and months you save with a lump sum or extra monthly payment. Compare finishing sooner with lowering the EMI.

What you'll learn:

When a prepayment saves the most
Part payment scenarios on ₹50 lakh
Prepay or invest the surplus

Prepayment

Currency

Loan amount

₹

Interest rate

Tenure

Processing fee

Prepayments

Lump-sum

₹

Extra / month

₹

After prepay

Compare with my salary

Take-home / month

₹

Existing EMIs

₹

Monthly EMI-

Principal-

Total interest-

Total payment-

Interest share-

Without prepay-

With prepay-

You save-

Payment breakup

Principal
Interest

Amortization schedule

Starting from

Yearly principal vs interest

Principal
Interest

#	Date	EMI	Principal	Interest	Balance

What this calculator shows

This loan prepayment calculator shows how a lump-sum or monthly extra payment cuts interest and shortens tenure on a reducing-balance loan. It starts from outstanding principal, current rate, and remaining months, not the original sanction amount.

Enter the running loan with Manual sliders, or AI mode (for example, outstanding 60 lakh at 8.1% for 25 years). Then compare keep-EMI-and-finish-earlier versus lower-EMI-and-keep-the-end-date. The same tool helps after you have a home loan EMI running.

How to use this calculator

Start with outstanding principal from the latest statement, plus current rate and remaining tenure. Or switch to AI and describe the running loan.
Add a lump-sum (bonus) and/or a monthly extra you can sustain without draining emergency savings.
Toggle reduce tenure versus reduce EMI after prepay. Tenure cuts usually save more interest when cash flow still allows the original home loan EMI.
Read months saved and interest saved, then export the schedule if you want a paper trail for the bank discussion.
If a lower rate elsewhere looks better, compare this prepayment path with the balance transfer calculator before you pay switching fees.

When prepayment saves the most on EMI interest

Interest each month is charged on outstanding principal. Cutting that balance early removes many future interest accruals. The same rupee paid near the end has less time left to help.

Floating home loans for individuals often allow unlimited prepayment without penalty, but product rules vary. Confirm foreclosure charges and notice periods in your agreement.

Do not empty emergency reserves to chase interest savings. Liquidity shocks are usually more expensive than a few months of loan interest.

Reducing EMI after prepay helps cash flow; reducing tenure usually cuts more total interest if the old EMI still fits.

Key takeaways

Prepaying early multiplies savings because interest each month is charged on a larger outstanding balance.
Many floating home loans for individuals allow unlimited prepayment without penalty, but product rules still vary: confirm your agreement.
Keeping EMI fixed and cutting tenure usually saves more interest than lowering EMI and keeping the end date.
Do not empty emergency reserves to chase interest savings; liquidity shocks often cost more than a few months of loan interest.

Decision tips before you borrow

Prepay when the math beats your realistic alternative use of cash, and when the loan contract does not punish the payment.

Prepay early while the outstanding is still large.
Keep an emergency fund before locking cash into prepayment.
On floating home loans for individuals, foreclosure charges are often nil: confirm your agreement.
Compare prepaying at loan rate versus investing only when you are honest about risk and tenure.
Re-run the home loan EMI calculator after a large prepay so the new schedule matches the bank letter.

₹60 lakh at 8.75% for 25 years, ₹3 lakh lump sum in month 36

Without extras, EMI is about ₹49,329 and lifetime interest is roughly ₹88.0 lakh over 300 months. A ₹3 lakh lump sum after 36 EMIs, with EMI held constant, shortens the loan by about 36 months and cuts interest by roughly ₹15.0 lakh. Enter your statement outstanding and remaining tenure above, then toggle reduce-tenure versus reduce-EMI to match how your lender will apply the credit.

Formula: We apply extras to outstanding principal on a reducing-balance schedule. The default path keeps EMI constant and shortens tenure, which matches many floating home loan bank processes.

Part payment scenarios on a ₹50 lakh home loan

Same loan in every row: ₹50 lakh at 8.5% for 20 years, EMI about ₹ 43,391. Each part payment cuts principal and the EMI stays the same, so the loan ends sooner. Without any part payment you pay about ₹54.1 lakh in interest.

Part payment plan	Total interest	Interest saved	Loan closes in
No part paymentEMI only	₹54.1 lakh	-	20 yrs
₹2 lakh once, after 1 yearBonus or maturity amount	₹46.8 lakh	₹7.3 lakh	18 yrs 3 mo
₹50,000 every yearPaid after every 12th EMI	₹42.7 lakh	₹11.5 lakh	16 yrs 4 mo
One extra EMI every yearAbout ₹ 43,391 once a year	₹43.8 lakh	₹10.3 lakh	16 yrs 9 mo
₹5,000 extra every monthAdded to each EMI	₹40.2 lakh	₹13.9 lakh	15 yrs 7 mo
EMI raised 5% every yearStep-up as salary grows	₹34.6 lakh	₹19.5 lakh	12 yrs 3 mo

In this set, the 5% yearly EMI step-up saves the most, about ₹19.5 lakh, and closes the loan in 12 yrs 3 mo. Habits you keep every year beat a single large payment, because the savings compound over the whole loan. A one-time ₹2 lakh still matters: paid in year one, it removes about ₹7.3 lakh of interest on its own.

To run your own numbers, enter the outstanding balance, rate and months left in the calculator above, then add a lump sum, a monthly extra, or both. For a step-up plan, raise the monthly extra each year and re-run. Prefer a spreadsheet? The EMI calculator Excel sheet takes a monthly part payment and a lump sum too.

Figures are estimates for education and planning and may differ from your lender’s schedule due to fees, floating rates, or product rules.

Last updated on Aug 7, 2026.

FAQs

What is part payment on a home loan?

A part payment is any amount you pay toward principal on top of the regular EMI, either once or on a schedule. It lowers the outstanding balance, so every later EMI carries less interest. This EMI calculator with prepayment shows the effect before you pay.

Do banks charge for part payment on a floating-rate home loan?

RBI rules do not allow prepayment or foreclosure charges on floating-rate loans taken by individuals for non-business purposes. Fixed-rate loans and business loans can carry a charge, so check your agreement.

Should I reduce EMI or reduce tenure after prepaying?

If you can keep paying the same EMI, reducing tenure usually saves more interest. Reducing EMI improves monthly cash flow but leaves more months for interest to accrue. This tool defaults to reduce-tenure for that reason.

When does prepayment save the most?

Early in the loan, while outstanding principal is still high. The same rupee paid near the end has fewer remaining months of interest to remove.

Are there foreclosure charges on home loan prepayment?

Many floating-rate home loans allow prepayment with low or no foreclosure charges, but rules vary by country and lender. Always confirm your loan agreement and any notice period before you instruct the bank.

Should I prepay or invest the surplus instead?

Compare the loan rate to a realistic, risk-adjusted return you will actually earn for the same horizon. Guaranteed interest saved on the loan is not the same as a volatile market return.

Can I combine a lump sum with a monthly extra?

Yes. Many borrowers put a bonus in as a lump sum and keep a smaller monthly top-up. Enter both here to see the combined months and interest saved before you instruct the bank.

What if my bank applies prepayment to EMI instead of tenure?

Ask them to confirm the method in writing. If they reduce EMI by default, request a tenure reduction when you can keep the old EMI, then re-run this calculator with that choice selected.