Free tool
Home loan prepayment calculator
Got a bonus or some savings? See how much interest a one-time prepayment saves, and how many EMIs it takes off your loan.
Monthly reducing balance, no prepayment charge. Your loan agreement sets any charge and minimum amount.
What a prepayment does
A prepayment (or part-payment) is money you pay on top of your EMIs. All of it goes to principal, the amount you actually owe. Since interest is charged on what you owe, a smaller balance means less interest every month from then on.
An illustrative example
Take a ₹60 lakh loan at 8.5% for 20 years (example figures). The EMI is about ₹52,070. Pay ₹3 lakh extra after year 3 and keep the EMI the same, and the calculator shows the interest saved and how many months come off the end. Choose “reduce EMI” instead and you will see a lower EMI but a smaller saving.
Before you prepay
- Keep about six months of expenses aside first.
- Ask the bank to confirm in writing whether it cut your tenure or your EMI.
- Collect a revised repayment schedule after every prepayment.
See the full repayment table in the amortisation schedule, or start with the EMI calculator. These are planning figures; your lender’s statement is final.
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FAQ
Questions people ask
Should I reduce my tenure or my EMI after prepaying?
Reducing the tenure saves more interest, because the same EMI now clears a smaller balance faster. Reducing the EMI gives you more room each month. If your budget is comfortable, the tenure option usually wins; try both in the calculator.
Why does an early prepayment save so much?
Interest is charged every month on the balance left. A rupee of principal you remove in year 3 stops attracting interest for every remaining month of the loan, so the saving is far larger than the same rupee paid near the end.
Will my bank charge me for prepaying?
For a floating-rate home loan taken by an individual for a non-business purpose, RBI directions do not allow banks to levy a prepayment or foreclosure charge. Fixed-rate loans can be different. Your loan agreement states the terms, so read it and ask your lender in writing.
Is prepaying better than investing the money?
Prepaying earns you a sure return equal to your loan rate. Investing may earn more or less, with risk. Many families keep an emergency fund first, then prepay with bonuses. The rent vs buy calculator shows how investment returns change the picture.
Does prepaying affect my tax deduction?
It can. Under the old tax regime, deductions for home-loan interest (s.24(b)) and principal (s.80C) have ceilings. Paying less interest may lower the deduction you use. Check the current position with the Income Tax Department or your CA.
Want to run these numbers on a real home?
Ask the Reeva team for the price of a home at The Shalott Marque, then put it into the calculator. We will walk you through the costs, the paperwork and the loan, plainly.