Loan Prepayment Calculator
A loan prepayment calculator shows how much interest you save and how much sooner your loan closes when you add a fixed extra amount to your EMI every month, compared to paying only the scheduled EMI.
Compares two amortisation schedules — one with only the scheduled EMI, one with EMI + extra monthly prepayment — and reports the difference in total interest paid and total months to close.
Input: ₹40 lakh loan at 9% for 20 years, ₹5,000/month extra prepayment
Result: Tenure shortens by several years and total interest paid drops substantially compared to paying only the scheduled EMI
Is prepaying a home loan always the best use of extra money?
Not always — compare the loan's interest rate against what you could earn investing that money instead; prepayment is more attractive when the loan rate exceeds your realistic investment return.
Do banks charge a penalty for prepayment?
Most Indian banks don't charge prepayment penalties on floating-rate home loans (per RBI regulation), but fixed-rate loans and other loan types may still carry charges — check your specific loan terms.
Loan Prepayment Calculator: how it works
A prepayment calculator compares a loan's original schedule against one with an extra payment applied, showing the interest saved and months shortened.
Formula
Recompute the EMI schedule after reducing the outstanding principal by the prepayment; the interest saved is the difference between the two totals.