Loan Prepayment Calculator
Prepaying a loan saves interest, but how much depends on two things borrowers usually get wrong: when the lump sum is paid, and whether you ask the lender to cut the tenure or the EMI. Reducing the tenure almost always saves more. The calculator below quantifies both.
Ask the lender to reduce
Interest saved
₹14,57,301
Loan closes 45 months earlier
Reducing the tenure almost always saves more than reducing the EMI. Switch the toggle to compare. Check your loan agreement for foreclosure charges before prepaying - these are not deducted above.
This calculator returns arithmetic on the figures you enter. It is not an offer, does not check your eligibility, and cannot predict the rate a lender will sanction. Loans Got Easy is an authorised Direct Selling Agent - we do not sanction, approve or disburse loans.
Tenure reduction beats EMI reduction
Given the same lump sum, keeping the EMI unchanged and shortening the loan saves substantially more interest than keeping the end date and lowering the instalment. The reason is simple: a shorter loan accrues interest for fewer months. Lenders often default to reducing the EMI because it feels like immediate relief, so this has to be requested explicitly and in writing. Run both modes in the calculator and the gap is usually stark.
Early prepayment is worth far more than late
In the early years of a loan, most of each EMI is interest and very little is principal. A lump sum then removes principal that would otherwise have accrued interest for the remaining fifteen or twenty years. The same amount paid in year fifteen removes principal that had only a few years left to run. On a typical home loan, prepaying in year two can save several times what the identical amount saves in year twelve.
Check what prepayment costs before you make it
Floating-rate home loans to individual borrowers generally carry no foreclosure or prepayment charge. Fixed-rate loans, personal loans and vehicle loans commonly do, often 2% to 5% of the amount prepaid or of the outstanding principal. A charge does not automatically make prepayment wrong, but it has to be set against the interest saved. Ask for the schedule of charges in writing.
Prepay or invest is a real question
Prepaying a loan gives a guaranteed, risk-free return equal to the loan's interest rate, net of any tax relief you lose on the interest. Investing might return more, but not with certainty. A home loan at 8.5% where you are claiming the Section 24 interest deduction has an effective cost below the headline rate, which narrows the gap. A personal loan at 18% is a different calculation entirely - very little investment reliably beats that, and clearing it first is usually the right call.
Rates sourced from partner lender published rate schedules, last verified August 2026. Figures produced by this calculator are indicative and depend entirely on the inputs you provide. The rate you are offered is set by the lender based on your credit profile, income, employer, loan amount and tenure.
Frequently Asked Questions
Reducing the tenure saves more interest in almost every case, because the loan simply runs for fewer months. Reducing the EMI is the better choice only when monthly cash flow is genuinely tight and the relief matters more than the total saving. Lenders often apply EMI reduction by default, so state your preference in writing.
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Rates last verified August 2026. Loans Got Easy is a loan advisory and Direct Selling Agent. We do not sanction, approve or disburse loans - the lender does, based on its own credit assessment.