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Home loan prepayment calculator

Paying a little extra towards a loan, especially early, removes interest you would have paid for years. This shows the saving — and whether investing that money would do better.

₹
₹50 lakh
 %
Home loans 8–10% · car 9–11% · personal loans 11–24%
 yrs
How you’ll prepay
₹
₹1 lakh
After prepaying, keep…
 %
Equity funds: 10–12% long-term, not guaranteed
Interest you save
₹18,55,389
and the loan ends 6 yrs early
Interest without prepaying
₹54,13,879
Interest with prepaying
₹35,58,489
New loan length
14 yrs

Loan balance over time

0₹12.5 L₹25 L₹37.5 L₹50 LYr 0Yr 4Yr 8Yr 12Yr 16Yr 20
Without prepayingWith prepaying

Prepay or invest? (at 20 years)

Prepay the loan
₹43.82 L
Invest the EMIs you no longer pay
Invest insteadAhead
₹54.42 L
Same money, at 11.0%

Both paths spend exactly the same money each month. Prepaying earns a guaranteed 8.50%; investing earns whatever markets give.

At your expected return, investing comes out ahead — but only if that return actually shows up. Splitting the extra money between the two is a sensible middle path.
How it’s calculated

The maths, in plain words

Prepayment goes to principal

Every extra rupee cuts the balance directly, so all future interest on that rupee disappears.

Shorter tenure or lower EMI

Keeping the EMI the same and finishing early saves the most interest. Lowering the EMI gives you breathing room each month instead.

Or invest it

We also grow the same extra money at your expected return, so you can compare: guaranteed interest saved vs possible market growth.

Questions

People also ask

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Are there charges for prepaying a home loan?
Not on floating-rate loans taken by individuals for non-business purposes: RBI rules bar prepayment and foreclosure charges on them. Fixed-rate loans, which covers most car and personal loans, can still charge around 2–5%, so check your loan agreement.
Is it better to reduce EMI or tenure?
Reducing tenure saves noticeably more interest. Reduce the EMI only if your monthly budget is tight.
Should I prepay or invest?
Prepaying earns a guaranteed return equal to your loan rate. Investing might earn more but isn’t guaranteed. Many people do both: prepay a fixed amount yearly and keep their SIPs running.
Understand it

Related guides

All guides
Borrow5 min read

How EMI works — and why early EMIs are mostly interest

Watch a loan’s EMI split between interest and principal month by month, and see why tenure and early prepayments matter so much.

Borrow6 min read

Prepay your home loan or invest the money?

A fair, rupee-for-rupee comparison — and a simple way to decide based on your loan rate, your returns and your temperament.

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