Loan Prepayment
How much interest does a prepayment save — tenure vs EMI
Prepayment Details
When you make the lump-sum payment
Additional amount every year after the lump sum
Prepayment Benefit
Reducing tenure saves more interest
Outstanding Balance — With vs Without Prepayment
Prepayment Impact Analysis
Original total interest (no prepayment)
₹54.14 L
Total interest with prepayment
₹39.68 L
Interest saved
₹14.45 L
Original tenure
20 years
New tenure after prepayment
17 years
Years saved
3 years (44 months)
Prepayment Strategy
→ Always reduce tenure, not EMI — reducing tenure saves significantly more interest as the loan closes faster.
→ Prepayment in early years is more valuable — each rupee saves more interest since more years of compound interest are avoided.
→ Most home loans: NO prepayment penalty (floating rate). Fixed rate may have 2% penalty — check your loan agreement.
→ Compare: if loan rate = 8.5%, but investment return = 12%, investing may be better than prepaying. If rates are equal, prepay first.
→ Tax angle: if you're in 30% slab and claiming ₹2L Sec 24(b), effective interest cost is only 8.5% × (1−0.30) = 5.95%. Investing at higher return beats prepayment.
Refinance at lower rate — then prepay aggressively.
Compare home loan rates from 30+ banks. Check eligibility in 2 min.
Check Loan EligibilityInstant pre-approved home loan offers based on your credit profile.
See Pre-approved OffersAffiliate partnerships help keep FiledIn free. We only list platforms we'd recommend regardless.
FAQ
Loan Prepayment — FAQ
Common questions about this calculator
Reducing tenure always saves more interest. Reducing EMI gives more monthly cash flow but costs more in total interest.
Calculations are approximate and for educational purposes only. Excludes surcharge for income above ₹50L. Consult a Chartered Accountant for personalised tax advice.