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Loan Prepayment Calculator India 2026 – Interest Saved

Use this free Loan Prepayment Calculator in India to calculate the exact interest savings and tenure reduction from any part-payment you make on your loan.

See how much interest you save by making a lump-sum prepayment.

Interest Saved

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Original Interest

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Interest After Prepay

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Total Savings

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Months Saved

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Loan Amount (₹)

Interest Rate (% p.a.)

Tenure (months)

Prepayment Amount (₹)

📊 What is the Loan Prepayment Calculator and How Does It Work?

When you prepay a loan, the outstanding principal reduces immediately. All future interest is calculated on the new lower balance — significant savings that compound over the remaining tenure. Reducing tenure (vs reducing EMI) saves significantly more total interest.

Formula

Interest saved = Total interest (original schedule) – Total interest (revised schedule)  |  New tenure = –log(1–r×new_balance/EMI) ÷ log(1+r)

🪓 Step-by-Step: How to Use This Calculator

Enter loan details: principal, rate, and original tenure
Enter the prepayment amount and when you plan to prepay
Choose reduce tenure or reduce EMI as your preference
Click Calculate to see total interest saved and new repayment schedule

📌 Example Calculation

₹30L home loan at 8.5% for 20 years, prepay ₹5L after year 5: saves ₹9.7L in interest, tenure reduced 3.5 years. Prepaying ₹5L returns ₹9.7L — a 1.94× return!

✅ Benefits of Using This Calculator

Calculate exact savings from any prepayment amount
Compare tenure reduction vs EMI reduction options
Decide optimal timing — earlier prepayment saves more
Evaluate if prepayment beats an equivalent investment
Plan annual bonus utilisation for maximum benefit
Check if prepayment penalty still makes financial sense

⚙️ Key Factors That Affect Results

Remaining loan balance at time of prepayment
Interest rate — higher rate means more savings from prepayment
Time remaining — earlier prepayment saves exponentially more
Prepayment amount
Tenure vs EMI reduction choice
Prepayment charges (0–3% for some loan types)

❓ Frequently Asked Questions

Reduce tenure or EMI after prepayment?▼

Reducing tenure saves significantly more total interest. Reducing EMI improves monthly cash flow. Financial advisors recommend tenure reduction.

When is the best time to prepay?▼

As early as possible — in the first 5 years when 80–90% of your EMI is interest. Prepaying then saves the most.

Is there a prepayment penalty?▼

RBI prohibits charges on floating-rate home loans. Fixed-rate loans may have 2–4% penalty. Personal loans: 1–5%.

Should I prepay or invest the lump sum?▼

Home loan at 8.5% vs expected equity return at 12%: investing may be better mathematically. But prepayment is completely risk-free.

Can I make multiple small prepayments?▼

Yes. Even ₹50,000–1 lakh annually saves significantly over the full tenure. Every prepayment helps.

About This Tool

Uses standard financial formulas. Results are indicative — consult a financial advisor for important decisions.

🔒 Privacy: All calculations run locally in your browser.