When you prepay a loan, the entire prepayment amount goes directly toward reducing your outstanding principal — not toward interest. Since interest is calculated on the remaining principal balance, even a small prepayment early in the loan tenure can save a disproportionately large amount of total interest. Most borrowers know prepayment saves money but don't know exactly how much. This calculator shows you the precise numbers: how much interest you save, how many months your tenure is reduced, and the revised EMI schedule — so you can make informed decisions about whether to prepay or invest that money elsewhere. All calculations run locally in your browser. Your financial data (loan amount, interest rate, prepayment amounts) is never transmitted to any server.
lightbulb When to use this tool
- check_circle Calculate exact interest savings before making a lump-sum loan prepayment
- check_circle Compare 'reduce EMI' versus 'reduce tenure' prepayment strategies
- check_circle Determine the optimal timing for prepayment (year 2 vs year 10 vs year 15)
- check_circle Plan annual prepayments using bonuses, tax refunds, or investment maturity amounts
- check_circle Compare prepayment savings across multiple loans to decide which to prepay first
- check_circle Calculate the break-even point: is prepaying better than investing the same amount?
Why use our tool?
Precise Interest Savings Calculation
See the exact rupee amount of interest saved — not an estimate. The calculator uses the standard reducing-balance EMI formula that banks use, giving you numbers that match your loan statement.
Tenure Reduction Visibility
See how many months or years your loan is shortened by the prepayment. For home loans, even a moderate prepayment can reduce tenure by 1-3 years, freeing you from debt significantly earlier.
EMI vs Tenure Comparison
Toggle between 'reduce EMI' and 'reduce tenure' options to see which saves more interest. Spoiler: reducing tenure almost always saves more, but reducing EMI provides immediate monthly cash flow relief.
Multiple Prepayment Scenarios
Enter one-time or recurring annual prepayment amounts to model different strategies. Compare the impact of a single ₹5 lakh prepayment versus ₹50,000 per year for 10 years.
Complete Amortization Schedule
View the month-by-month breakdown showing principal, interest, outstanding balance, and the effect of each prepayment. This matches the schedule your bank provides.
How it works
Enter your current outstanding principal (check your last bank statement or loan account portal).
Enter the current interest rate (for floating rate loans, use the current applicable rate).
Enter remaining tenure in months.
Enter the prepayment amount you are considering.
The calculator shows revised tenor, interest saving, and new EMI under both scenarios.
Examples
science ₹5 Lakh Prepayment on Home Loan
Outstanding: ₹35,00,000 | Rate: 8.5% | Remaining: 180 months (15 years) | Prepayment: ₹5,00,000
Option A (same EMI): Tenure reduces by ~28 months | Interest saved: ₹3,44,000
Option B (same tenure): EMI reduces by ~₹3,900/month | Interest saved: ₹1,76,000
Verdict: Option A saves nearly double the interest