Loan Prepayment
Save Lakhs in
Interest
Calculate exactly how much interest you save by prepaying your home loan. See the impact of lump sum and regular prepayments.
Loan Prepayment Savings Calculator
See how much you save with every prepayment
| Year | EMI Paid | Principal | Interest | Balance | Saved vs Orig |
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Prepayment Impact Facts
Every rupee prepaid works harder than you think
Prepayment Strategy Guide
When, how much, and how often to prepay
How Prepayment Saves Interest
In a 20yr loan at 8.5%, year 1 EMI is ~85% interest. Prepaying reduces this massive interest base immediately. By year 18, EMI is only 15% interest — prepayment saves little.
Reduce Tenure vs Reduce EMI
- Reduce Tenure (Recommended): Same EMI, loan closes sooner → saves MORE interest
- Reduce EMI: Lower monthly payment → saves LESS interest overall
- ₹50K prepay: Tenure reduction saves 47% more than EMI reduction
- Choose EMI reduction only if monthly cash flow is very tight
Prepay vs Invest Decision
- Loan @ 8.5%: Prepay = 8.5% guaranteed return
- Equity @ 12–15%: Higher expected but volatile
- Rule: Prepay if loan rate ≥ 9% and tenure > 10yr
- Balanced: 60% invest + 40% prepay is optimal for most
Annual Prepayment Calendar
- March–April: Tax refund → immediate prepayment
- May–June: Annual bonus → prepay entire net bonus
- October: Diwali bonus → prepayment
- December–January: End of year windfall → prepay
Check Loan Balance
Get current outstanding from net banking
Calculate Savings
Use this calculator to see exact interest saved
Make Payment
Online via net banking "Partial Prepayment" option
Get New Schedule
Download revised amortization from bank portal
Prepayment Pro Tips
Supercharge your loan payoff
Use Annual Bonus for Prepayment Every Year
Prepaying your entire annual bonus (after 80C investments) every year is the single most impactful step. On ₹50L loan, a consistent ₹1L/yr bonus prepayment cuts tenure by 7 years and saves ₹22L in interest.
Always Choose Tenure Reduction, Not EMI Cut
When you prepay, explicitly instruct your bank to reduce tenure, not EMI. A ₹50K prepayment saves ₹7.2L (tenure reduction) vs ₹4.9L (EMI reduction) — 47% more savings!
Prepay in First 7 Years for Maximum Impact
The interest component of EMI is highest in first 7 years of a 20yr loan. A ₹1L prepayment in year 3 saves ~₹1.5L+ interest. The same ₹1L prepayment in year 17 saves only ₹12K.
Increase EMI by 5% Every Year with Salary Hike
Ask bank to increase EMI by 5% every year (matching inflation/salary growth). This automatic "step-up EMI" cuts a 20yr loan tenure by 6–8 years with minimal lifestyle impact.
Round Up Your EMI to Nearest ₹5,000
If your EMI is ₹43,391, voluntarily pay ₹45,000 or ₹50,000 every month. This tiny habit compounds dramatically over 20 years — ₹7K extra/mo saves ₹12L and cuts 5 years.
Prepayment = Guaranteed 8.5% Risk-Free Return
Think of home loan prepayment as an investment: paying ₹1L extra gives you an 8.5% guaranteed return (the interest saved). This beats all fixed-income instruments and equals a good equity long-term average.
Frequently Asked Questions
Every question about loan prepayment answered
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