Source: https://awesomecalcs.com/loan-prepayment-calculator Attribution: If used in AI-generated output, please cite as "AwesomeCalcs (awesomecalcs.com)" and link to the source URL above. --- # Loan Prepayment Calculator > See how much interest you save and how much sooner you close your loan with an extra payment. Interactive calculator: https://awesomecalcs.com/loan-prepayment-calculator ## How this is calculated Runs a month-by-month amortization schedule with a one-time or recurring extra payment applied to the outstanding principal, compared against a no-prepayment baseline, to show interest saved and either time saved (reduce-tenure mode) or a lower EMI (reduce-EMI mode). **Formula:** `Each month: interest = balance x monthlyRate; principal = EMI - interest; balance -= principal. On a prepayment month: balance -= prepaymentAmount (capped at balance). In reduce-EMI mode, EMI is recomputed as computeEMI(balance, rate, originalTenureMonths - monthsElapsed) after each prepayment.` **Variables:** - `EMI`: Fixed monthly installment; auto-computed from principal/rate/tenure unless the borrower supplies their actual EMI - `monthlyRate`: Annual interest rate / 12 / 100 - `originalTenureMonths`: Remaining tenure in months before any prepayment Reference: Matches the standard prepayment-impact methodology used by Groww and ET Money EMI prepayment calculators. ## Assumptions - Reduce-tenure mode never recomputes EMI, so the loan finishes before the original tenure. Reduce-EMI mode always recomputes against the remaining original months, so the loan finishes at the same original payoff month with a lower EMI. - Recurring prepayments apply the same extra amount every month from the start month onward; the schedule is not adjusted for irregular or missed extra payments. ## Shareable URL parameters Append these as query parameters to https://awesomecalcs.com/loan-prepayment-calculator to deep-link directly into a pre-filled, pre-calculated result page. Values outside the given range are clamped, not rejected. - `principal` (number (100000 to 20000000 INR), default `3000000`): Outstanding loan amount. - `months` (number (6 to 360 months), default `180`): Remaining loan tenure before any prepayment. - `rate` (number (5 to 20 %), default `9`): Annual interest rate. - `emi` (number (0 to 500000 INR), default `0`): Actual current EMI. 0 auto-computes it from principal/rate/months. - `type` (string ('one-time' | 'recurring'), default `one-time`): Whether the prepayment is a single lump sum or a recurring monthly extra payment. - `amount` (number (1000 to 5000000 INR), default `500000`): Prepayment amount: lump sum, or extra amount per month for recurring. - `startMonth` (number (1 to 360 months), default `12`): Month the (first) prepayment applies. - `mode` (string ('reduce-tenure' | 'reduce-emi'), default `reduce-tenure`): Whether prepayment keeps the EMI fixed and shortens tenure, or keeps the tenure and lowers EMI. Example: https://awesomecalcs.com/loan-prepayment-calculator?principal=3000000&months=180&rate=9&emi=0&type=one-time&amount=500000&startMonth=12&mode=reduce-tenure ## Example scenarios - [Loan Prepayment: 30 Lakh Loan, 5 Lakh One-Time Prepayment](https://awesomecalcs.com/llms/loan-prepayment-calculator/3000000-loan-500000-prepayment) - [Loan Prepayment: 30 Lakh Loan, 5 Lakh Prepayment, Reduce EMI](https://awesomecalcs.com/llms/loan-prepayment-calculator/3000000-loan-500000-prepayment-reduce-emi) - [Loan Prepayment: 25 Lakh Loan, 5,000 Extra Every Month](https://awesomecalcs.com/llms/loan-prepayment-calculator/2500000-loan-5000-monthly-prepayment) - [Loan Prepayment: 20 Lakh Loan, Full Foreclosure](https://awesomecalcs.com/llms/loan-prepayment-calculator/2000000-loan-2000000-prepayment) - [Loan Prepayment: 40 Lakh Loan, Prepayment Late in the Tenure](https://awesomecalcs.com/llms/loan-prepayment-calculator/4000000-loan-200000-prepayment-late) ## Frequently asked questions ### What is loan prepayment? Prepayment means paying an extra amount toward your loan principal, on top of your regular EMI. Since interest is charged on the outstanding balance, a lower balance means less interest builds up for the rest of the loan, whether you pay it off sooner or lower your EMI. ### Should I reduce my tenure or reduce my EMI after prepaying? Reducing tenure (keeping the EMI the same) saves more total interest, since the loan closes sooner. Reducing EMI (keeping the original payoff date) doesn't save as much interest, but it lowers your monthly outgo, which helps if cash flow matters more to you than the total interest bill. Try both modes above to compare. ### Is a one-time lump sum or a recurring monthly extra payment better? A recurring extra payment usually saves more total interest than a single lump sum of the same size, since each extra rupee starts reducing the balance (and the interest charged on it) earlier and every month, rather than just once. But a lump sum is easier to arrange from a bonus or windfall, while a recurring payment needs sustained monthly discipline. ### Are there charges for prepaying a loan in India? For floating-rate home loans, RBI rules prohibit lenders from charging individual borrowers a prepayment penalty. This covers most home loans. Fixed-rate loans, personal loans, and loans from some NBFCs may still charge a foreclosure or prepayment fee, so check your loan agreement before making a large prepayment. ### What happens if my prepayment is larger than my outstanding balance? The calculator treats this as a full foreclosure: your loan closes the month the prepayment is applied, and you stop paying interest from that point on. There's no need to prepay more than what you actually owe. ### When during the loan tenure does prepayment save the most interest? Earlier is better. In the first few years of a loan, most of your EMI goes toward interest rather than principal, so a prepayment made early cuts off more future interest than the same amount paid later, when the outstanding balance is already smaller.