Home Loan Prepayment Calculator
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Home Loan Prepayment Calculator summary
Calculation schedule
Figures may be rounded for display.
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Home loan prepayment calculator formula
A prepayment reduces the loan balance. Future interest is then charged on that smaller balance.
Monthly rate = yearly rate ÷ 12 ÷ 100 EMI = principal × rate × (1 + rate)^months ÷ ((1 + rate)^months − 1) New balance = balance on payment date − prepayment Interest saved = old remaining interest − new remaining interest − prepayment charge
Keep EMI means the same payment continues and the loan may finish sooner.
Keep tenure means the remaining time stays the same and the EMI is recalculated.
Example with numbers
Outstanding loan is ₹40,00,000 at 8.5% with 15 years left. EMI is about ₹39,390. An immediate ₹5,00,000 prepayment while keeping the same EMI can reduce the remaining schedule to about 141 months and save roughly ₹10.51 lakh in interest before any charge.
What is a home loan prepayment calculator?
A home loan prepayment, also called a part payment, is extra money paid towards the outstanding principal. It is separate from the normal EMI.
This calculator compares the old loan path with the path after one prepayment. It shows what changes when EMI or tenure is kept.
How to use the prepayment calculator
- Enter the current outstanding principal, rate and remaining time.
- Enter the prepayment amount and when it will be paid.
- Choose whether to keep EMI or keep the remaining tenure.
- Add a prepayment charge only when it really applies, then compare both schedules.
What the results mean
- Original EMI: the payment before prepayment.
- Revised EMI or tenure: the value changed by the chosen strategy.
- Interest saved: old interest minus new interest and the entered charge.
- Months saved: the reduction in payoff time when EMI is kept.
How this prepayment calculation works
Before the selected payment month, both loan schedules are the same. The extra payment is then removed from the balance and later interest uses the smaller principal.
An early prepayment usually changes more future interest than the same payment made much later. The monthly table makes that timing visible.
Why a prepayment calculator is useful
- It compares EMI reduction with tenure reduction.
- It shows the saving after an entered prepayment charge.
- It displays old and revised loan schedules.
- It makes the payment month part of the calculation.
Why the lender’s revised schedule may be different
A lender may use a different posting date, daily interest, floating-rate reset, EMI rounding or final payment.
The loan agreement decides how the part payment is used and whether a charge is allowed. Changes to tax deductions are not included here.
Sources
- Reserve Bank of India: Key Facts Statement for Loans and Advances
- Reserve Bank of India: reset of floating-rate EMI loans
Rule and source review: Amortisation method and consumer-source links reviewed 31 August 2026. Check the current lender statement and agreement.
Disclaimer
This home loan prepayment calculator gives an estimate from one rate and one part payment. It is not a lender statement or instruction to prepay. Check the loan agreement, current balance, applicable charges and the revised schedule supplied by your lender.
Frequently asked questions
How does a home loan prepayment save interest?
It reduces outstanding principal, so later interest is calculated on a smaller balance.
Should I reduce EMI or loan tenure?
Keeping EMI often saves more interest and finishes sooner. Keeping tenure can lower the monthly payment. The calculator shows both effects without choosing for you.
Does the timing of prepayment matter?
Yes. An earlier payment normally affects more future months than a later payment.
Does the calculator include a prepayment charge?
Only when you enter one. Check whether your loan agreement and current rules allow it.
Why is my bank schedule different?
The bank may use daily interest, another posting date, floating-rate changes and its own rounding.