Find out how much faster you can be debt-free.
Every rupee you pay above your required EMI goes straight toward reducing your outstanding principal, which means the lender charges you less interest on every subsequent installment. Because interest on a reducing-balance loan compounds against your outstanding balance, paying extra early in the loan — when the balance is largest — has an outsized effect on both the total interest you pay and how many months earlier you become debt-free.
This calculator takes your existing loan amount, rate, and tenure, plus a fixed extra amount you plan to pay every month, and shows you the new payoff date, the total interest saved, and a side-by-side comparison against sticking with the original schedule. Try the quick presets to see how even a modest ₹500-₹1,000 extra per month adds up over a 15-20 year home loan.
Prepaying is effectively a guaranteed, risk-free return equal to your loan's interest rate — if your loan is at 9%, paying it down early is like earning a guaranteed 9% post-tax return on that money. Whether that beats investing the same amount elsewhere depends on your loan's rate, your investment's expected return, your risk tolerance, and any tax benefits you're claiming on the loan (common with home loans under Sections 24 and 80C). There's no universally correct answer, but running the numbers here at least tells you exactly what prepaying is worth in your specific case.
Quick presets
Time saved
—
Total interest saved
$0
New monthly payment
$2,326
New total interest
$258,215
Does prepaying a loan always save money?
Almost always, yes, since it reduces the principal on which interest is charged going forward. The main exceptions are loans with prepayment penalties large enough to offset the interest saved, or tax-advantaged loans (like some home loans) where you're actively benefiting from the interest deduction and would rather invest the surplus instead.
Is it better to prepay or reduce my tenure?
Most lenders let you choose: keep the EMI the same and shorten the tenure, or keep the tenure the same and lower the EMI. Shortening the tenure while keeping the EMI fixed saves more total interest, since the loan is paid off faster — this calculator models that scenario by default.
Are there penalties for prepaying a loan?
For floating-rate loans taken by individuals for non-business purposes, RBI rules prohibit prepayment penalties. Fixed-rate loans and business loans may still carry a prepayment charge, typically 2-5% of the amount prepaid — check your loan agreement before making a large extra payment.
How much extra should I pay to see a real difference?
Even ₹500-₹1,000 extra a month can shave a year or more off a typical home loan tenure. Use the presets above or enter your own amount to see the exact impact on your specific loan.
Should I prepay in a lump sum or spread it monthly?
A lump-sum prepayment (say, from a bonus) reduces the principal immediately and saves interest from that point forward, while a recurring extra monthly payment saves interest gradually every month. Both help — a lump sum tends to have a bigger one-time impact, while consistent extra monthly payments compound over the life of the loan.