Got a lump sum — bonus, matured FD, or gift money? This calculator shows exactly how much interest you save and how many months you cut from your home loan or personal loan by making a prepayment today. Compare one-time lump sum vs extra monthly payments, and choose between reducing your EMI or closing the loan faster.
🏦 Loan Details
Remaining principal balance
Current rate on your loan
Months left to repay
If blank, we calculate from above inputs
💰 Prepayment Details
Lump sum amount you want to pay now
0 = apply immediately to current balance
🎯 What do you prefer after prepayment?
⏱️
Reduce Tenure
Keep same EMI, finish faster
📉
Reduce EMI
Keep same tenure, pay less monthly
Total Interest Saved
₹0
Tenure reduced by 0 months
Original EMI
—
New EMI / Tenure
—
Prepayment Amount
—
DetailsWithout PrepaymentWith Prepayment
Total Interest——
Total Amount Paid——
Remaining Tenure——
Monthly EMI——
💬 Summary
🤔 Prepay or Invest? Let's Help You Decide
If your loan rate is 8.5% and you can earn 12%+ in ELSS mutual funds — investing may beat prepaying. Talk to our expert or compare options.
⚠️ Disclaimer: Results are indicative and for informational purposes only. Actual amounts may vary based on your provider's specific terms, applicable charges, and other factors. FinMandi is an independent information platform — not a bank, NBFC, insurer, or registered investment adviser. Always verify figures directly with your bank or financial provider before making any financial decision.
Frequently Asked Questions
Reducing tenure saves significantly more interest. When you reduce EMI, you pay the same duration but less monthly — the principal reduces slowly. When you reduce tenure, you close the loan faster and pay far less total interest. For most borrowers, reducing tenure is the smarter choice — especially for home loans where even 2-3 years saved means lakhs of rupees in interest.
For home loans on floating rate — RBI mandates ZERO prepayment charges. Banks cannot charge any foreclosure or part-payment fee on floating rate home loans. For fixed rate home loans and personal loans — banks typically charge 2–4% of the outstanding amount as foreclosure charge. Car loans also have foreclosure charges of 2–5%. Always check your loan agreement for specific terms before prepaying.
Never use your entire savings for loan prepayment. Keep at minimum 6 months of expenses as emergency fund before making any prepayment. For example, if your monthly expenses are Rs 50,000 — keep at least Rs 3 lakh as emergency fund before using remaining savings for prepayment. Once prepaid, the money is locked in the asset — you cannot easily get it back if an emergency arises.
Compare your effective loan rate vs investment return. If home loan rate is 8.5% and you claim tax benefit under Section 24b (Rs 2L deduction), effective rate is ~6%. If equity mutual funds give 12%+ CAGR, investing beats prepaying. However, prepayment gives guaranteed return (equal to loan rate) and psychological peace. Recommended: Pay home loan EMI as scheduled, invest surplus in SIP, and make partial prepayment once a year from bonus.
The earlier you prepay, the more interest you save. In the initial years of a loan, most of your EMI goes toward interest — very little reduces the principal. Making a prepayment in year 1-5 saves dramatically more than the same amount prepaid in year 15-20. Use this calculator to compare: prepaying Rs 5 lakh today vs 5 years later — the difference in interest saved is typically Rs 2-4 lakh for a Rs 50L home loan.