Loan Prepayment Calculator - Save Interest & Reduce Tenure
Calculate savings from home loan prepayment. Find how much interest you save and how many months your loan tenure reduces with lump sum or regular prepayments.
About this calculator
The Loan Prepayment Calculator tests prepayment strategies on a home loan: a single lump sum, a fixed amount every year or a fixed amount every quarter. It reports the interest you save and how much the loan tenure shrinks, so you can see whether a bonus-driven annual prepayment is worth more than a one-off payment.
Enter the original loan amount, rate and tenure, how many EMIs you have paid and the prepayment amount, then pick the frequency and what should happen afterwards: shorter tenure with the same EMI, or the same tenure with a lower EMI. The result lists the outstanding balance today, the balance after the prepayment, the interest you would still have paid without it and the interest you will pay with it.
How to use it
- Enter the Original Loan Amount and the Annual Interest Rate.
- Enter the Original Tenure in years and the number of EMIs Already Paid.
- Enter the Prepayment Amount.
- Choose the Prepayment Frequency: one-time, annual or quarterly.
- Choose whether to Reduce Tenure or Reduce EMI afterwards.
- Press Calculate Savings.
Tips and common mistakes
- A smaller prepayment made every year can beat one large payment made late. Test both here.
- Always confirm with your lender whether a prepayment reduces tenure or EMI by default.
- Keep the receipt and an updated repayment schedule after every prepayment.
- Check your tax position: the principal deduction limit applies to scheduled repayments and prepayments alike under the old regime.
Frequently asked questions
Does prepayment affect my credit score?
Paying a loan down early is neutral to positive. Closing a loan completely can cause a small, temporary dip in some scoring models because the account mix changes.
What is better: annual or one-time prepayment?
A large one-time payment early saves the most. If you cannot make a large payment, regular annual or quarterly prepayments still add up.
Is the result exact?
It is exact for the inputs given and assumes a fixed rate. If your rate is floating, your actual result will move when the rate changes.
Why does the tool ask for EMIs already paid?
The balance depends on how many payments you have made. A prepayment later in the loan saves less interest than the same amount earlier.
Can I prepay a loan fully?
Yes, ask for a foreclosure statement. Some lenders levy fees on fixed-rate loans.
How is this different from the EMI Prepayment Calculator?
This version adds annual and quarterly prepayment patterns. The other focuses on a single lump sum.