Home loan prepayment calculator
Paying extra on your loan? Compare keeping the EMI and finishing early with lowering the EMI instead.
Example result
- Interest saved — reduce tenure
- ₹9,88,521
- Loan finishes earlier by
- 4 yrs 2 mo
- Interest saved — reduce EMI
- ₹3,86,266
- New EMI if you reduce EMI
- ₹24,618
Compare the options
| Option | EMI | Tenure | Total interest | Interest saved |
|---|---|---|---|---|
| Current loan | ₹29,542 | 15 yrs | ₹23,17,594 | ₹0 |
| Reduce tenure | ₹29,542 | 10 yrs 10 mo | ₹13,29,073 | ₹9,88,521 |
| Reduce EMI | ₹24,618 | 15 yrs | ₹19,31,328 | ₹3,86,266 |
How this is calculated
The current EMI is worked out from the outstanding principal, rate and remaining tenure. The one-time prepayment reduces the principal immediately. Then:
- Reduce tenure: the EMI stays the same (plus any monthly extra) and the schedule runs until the balance reaches zero.
- Reduce EMI: a new EMI is calculated on the lower principal over the same remaining tenure.
Interest saved = total interest on the current schedule − total interest on the new schedule.
Questions
Should I reduce tenure or EMI?
Reducing tenure saves more interest because the higher EMI keeps paying down principal faster. Reducing EMI frees up monthly cash flow. If your budget is comfortable, reducing tenure usually costs less overall.
Are there charges for prepaying?
For floating-rate home loans taken by individuals, RBI rules do not allow prepayment penalties. Fixed-rate loans may carry charges — check your loan agreement.
How is the monthly extra handled?
The extra amount is applied to principal every month in the "reduce tenure" option. The "reduce EMI" option uses only the one-time prepayment, so the two stay comparable.
Estimates for educational purposes only. Not financial, tax or investment advice.