Loan Prepayment Savings Calculator
What one extra annual prepayment does to your total interest and loan tenure. The single highest-return move most home-loan borrowers can make.
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Your result
Without prepayment, you pay ₹54.14 lakh in interest over 20 years. With an extra ₹50,000 once a year, you pay ₹42.66 lakh over 17 years. Net saving: ₹11.48 lakh, and you close the loan 3.7 years early.
- Monthly EMI
- ₹43,391
- Interest without prepayment
- ₹54.14 lakh
- Interest with prepayment
- ₹42.66 lakh
- Interest saved
- ₹11.48 lakh
- Years saved
- 3.7
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Compare with the tax-adjusted EMI cost
Run the same loan through the home-loan EMI calculator to see the net cost after 80C and 24(b) deductions, then decide if prepayment or SIP wins for you.
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Why early-year prepayments matter most
Indian home loans use reducing-balance amortisation. In year 1, roughly 70-80 percent of your EMI is interest, only 20-30 percent goes toward principal. By year 15 on a 20-year loan, the ratio flips. Prepaying ₹1 lakh in year 2 reduces the balance that interest accrues on for 18 more years; prepaying the same ₹1 lakh in year 15 only saves you 5 years of interest. Same money, vastly different impact.
How to do it
- Most banks now allow online prepayment via net banking. Look for "part payment" in your loan account section.
- You can choose to either (a) keep EMI the same and reduce tenure, or (b) keep tenure the same and reduce EMI. Reduce tenure is almost always the better choice mathematically.
- Time prepayments early in your financial year, not at year-end. The earlier in the year, the more months of interest you save.
- Keep records. Some banks issue updated amortisation schedules; some do not. Ask explicitly.