PLAN YOUR PAYOFF
Loan Prepayment Calculator
See how a one-time part payment reduces your loan tenure and interest, while keeping your EMI the same.
Your loan & prepayment
Enter your current loan details in rupees. Find the outstanding principal on your latest loan statement.
THE BIG PICTURE
Your prepayment impact
Your numbers, with a clearer view.
Enter your loan details and the extra amount you plan to pay to compare your payoff timelines.
Monthly estimate using annual interest ÷ 12. EMI and rate stay unchanged; prepayment goes toward principal. Bank figures may differ due to daily interest and payment dates. Charges are excluded.
Enter your loan details and the extra amount you plan to pay to compare your payoff timelines.How the loan prepayment calculator works
A one-time prepayment applied to principal reduces the balance on which future interest is calculated. Keep the same monthly payment and more of each subsequent payment goes toward principal, which can shorten the loan. This tool compares both repayment schedules from today, for an Indian home loan or another reducing-balance loan with monthly EMIs.
Formula
Monthly interest = opening principal × monthly rate; closing principal = opening principal + interest − payment
Example
At 0% interest, a balance of 12,000 with monthly payments of 1,000 takes 12 months to repay. A prepayment of 2,000 reduces the principal to 10,000 and saves two monthly payments. With interest, the time saved depends on the rate, balance, and payment.
Assumptions and limits
Prepayment occurs now, immediately after a regular payment, and is applied entirely to principal. The monthly principal-and-interest payment and rate stay constant; the last payment may be smaller. Amounts are in rupees, and monthly interest uses the annual rate divided by 12. Use the interest rate rather than an APR including fees. The model excludes daily interest accrual, changing rates, interest-only or flat-rate loans, arrears, escrow, insurance, fees, penalties, and lender rounding. A lender that lowers your payment instead of shortening the term will produce different results. Enter your current outstanding principal when previous rates, payments, or prepayments have changed.
Learn more about mortgage amortization (CFPB), and prepayment terms (FCAC).
Home loan part payment: how much tenure can you save?
A loan prepayment, also called a part payment or extra principal payment, is an additional amount paid toward your loan. This calculator answers one specific question: how much sooner could you repay the balance if you make a lump-sum payment now and keep your monthly payment the same?
How to use the prepayment calculator
- Enter your current outstanding principal in rupees from your loan statement.
- Enter your monthly principal-and-interest payment and current annual interest rate.
- Enter the one-time amount you plan to prepay toward principal.
- Select “Calculate savings” to compare principal, remaining months, and future interest. View the amortization table below the comparison to inspect each payment.
Worked example: prepaying ₹2 lakh on a home loan
Suppose your outstanding balance is ₹25 lakh, your annual interest rate is 8%, and your EMI is ₹30,000. Using a monthly interest estimate of 8% divided by 12, a ₹2 lakh prepayment produces this estimate:
- Outstanding principal after prepayment
- ₹23,00,000.00
- Remaining tenure before prepayment
- 123 months
- Remaining tenure after prepayment
- 108 months
- Months saved
- 15 months
- Estimated future interest saved
- ₹2,30,307.22
This example uses a constant rate and unchanged EMI, with no prepayment charges. Your own result depends on your loan details; ₹2 lakh does not save the same number of months on every loan.
Loan prepayment questions
How many months will a loan prepayment reduce?
There is no fixed number of months saved per amount prepaid. It depends on your outstanding principal, interest rate, monthly payment, and prepayment amount. The calculator compares the number of remaining payments in both schedules, keeping your monthly payment unchanged. A smaller final payment still counts as one month.
Does a ₹2 lakh prepayment reduce my principal by ₹2 lakh?
In this model, yes: a prepayment of ₹2,00,000 reduces outstanding principal by exactly ₹2,00,000. This assumes the entire amount is credited to principal immediately after a regular payment. Your lender may first apply money to accrued interest, overdue amounts, or charges; use the amount actually applied to principal.
Does part payment reduce EMI or loan tenure?
A lender may shorten the remaining term while keeping the EMI the same, or lower the EMI while keeping the term. This calculator models tenure reduction only. It does not estimate a reduced EMI. Confirm how your lender will apply the prepayment before comparing its revised schedule with this estimate.
Can I use this for an Indian home loan?
Yes, for a monthly estimate. Enter the outstanding principal, current interest rate, EMI excluding separate fees or insurance, and planned prepayment. The calculator uses your annual rate divided by 12 for a monthly estimate. Indian lenders may calculate interest daily and charge it monthly, so exact payment dates and month lengths can change the lender's result.
Can I use it for a car loan or personal loan?
Yes, for a reducing-balance loan repaid through monthly EMIs. Enter amounts in rupees. It does not model flat-rate loans, interest-only payments, balloon payments, or weekly repayment schedules.
What if my interest rate or EMI changed earlier?
Enter the current outstanding principal from your lender's statement, along with today's interest rate and EMI. This avoids reconstructing your previous payments or rate changes. Future rate changes are not included in either repayment comparison.
Reference sources
The CFPB explains principal, interest, and mortgage amortization. SBI’s home-loan terms describe daily reducing balances with monthly rests. These references explain why a monthly projection may differ from a lender’s dated schedule.