Knowledge Base

Loan Prepayment Calculator

Interest Saved = Original Interest − Interest After Prepayment

Prepaying even 5-10% of principal annually can save lakhs in interest over the loan term.

RBI rule: No prepayment penalty on floating rate loans for individuals.

Fixed rate loans may have 2-4% prepayment penalty — check your loan agreement.

Prepay during early years of the loan — that's when maximum EMI goes toward interest.

Part-prepayment can reduce tenure OR reduce EMI — choose tenure reduction for maximum savings.

Pro Tip

Annual bonus or increment? Allocate 50% to loan prepayment. On a ₹50L home loan at 8.5%, prepaying ₹2L/year saves ₹18L+ in interest.

Loan Prepayment Calculator - Complete Guide

Everything you need to know about Loan Prepayment Calculator and how to optimize your financial strategy.

Understanding the Formula

The core calculation is based on:

Interest Saved = Original Interest − Interest After Prepayment

Key Concepts & Rules

Prepaying even 5-10% of principal annually can save lakhs in interest over the loan term.

RBI rule: No prepayment penalty on floating rate loans for individuals.

Fixed rate loans may have 2-4% prepayment penalty — check your loan agreement.

Prepay during early years of the loan — that's when maximum EMI goes toward interest.

Part-prepayment can reduce tenure OR reduce EMI — choose tenure reduction for maximum savings.

Expert Strategy

Annual bonus or increment? Allocate 50% to loan prepayment. On a ₹50L home loan at 8.5%, prepaying ₹2L/year saves ₹18L+ in interest.

How to use this Calculator?

1. Enter your specific values in the input fields above.
2. The calculator will render instant results as you type.
3. Check the breakdown table for year-by-year projections.
4. Adjust the inputs to see how different scenarios impact the final result.