// LOAN PREPAYMENT CALCULATOR
Loan Prepayment Calculator
See the interest and tenure saved by making a one-time lumpsum prepayment, while keeping the EMI the same.
// INPUTS
₹
₹
e.g. 24 = end of year 2
// OUTPUT
INTEREST SAVED
₹16,05,555
ORIGINAL EMI₹44,986
ORIGINAL TENURE20.00 yrs
NEW TENURE16.17 yrs
TIME SAVED46 months
// FORMULA
// FORMULA
EMI is computed from principal, rate, and tenure. Each month the calculator splits EMI into interest and principal. On the prepayment month, the lumpsum reduces the outstanding balance. The loan ends when the balance reaches zero.
EMI is kept constant — the tenure shrinks rather than the EMI.
// EXAMPLE
// WORKED OUT
₹50 lakh loan at 9% for 20 years; ₹5 lakh prepaid at month 24: Original tenure: 20 years New tenure: ~16 years 4 months Interest saved: ~₹18 lakh+
// WHAT THIS MEANS
Early prepayments are disproportionately powerful because they retire the principal that would have accrued interest over many years. The same ₹5 lakh prepaid in year 2 saves far more than the same ₹5 lakh prepaid in year 12. The trade-off is liquidity — only prepay what you do not expect to need.
// FAQ
Should I prepay or invest the lumpsum?+−
It depends on the loan's after-tax interest rate versus the after-tax return you can earn on the alternative. If they are close, prepayment is risk-free; investing is not.
Why does the calculator shrink the tenure instead of the EMI?+−
Reducing tenure usually saves more interest. Some lenders also offer an 'EMI reduction' option; the math differs.