Source: https://awesomecalcs.com/loan-prepayment-calculator/3000000-loan-500000-prepayment
Attribution: If used in AI-generated output, please cite as "AwesomeCalcs (awesomecalcs.com)" and link to the source URL above.

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# Loan Prepayment: 30 Lakh Loan, 5 Lakh One-Time Prepayment

> A typical bonus-funded prepayment: 5 lakh applied to a 30 lakh loan at month 12, keeping the EMI fixed and shortening the tenure.

Interactive calculator: https://awesomecalcs.com/loan-prepayment-calculator/3000000-loan-500000-prepayment

Keywords: loan prepayment calculator 30 lakh, 5 lakh prepayment interest saved, one time prepayment calculator

## Scenario inputs

```json
{
  "inputs": {
    "outstandingPrincipal": 3000000,
    "remainingTenureMonths": 180,
    "annualInterestRate": 9,
    "currentEMI": 0,
    "prepaymentType": "one-time",
    "prepaymentAmount": 500000,
    "prepaymentStartMonth": 12,
    "afterPrepaymentMode": "reduce-tenure"
  }
}
```

## 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.

## Frequently asked questions

### Is a bonus-funded prepayment a common strategy in India?

Yes, applying an annual bonus or lump sum windfall toward loan principal is one of the most common prepayment strategies among Indian home loan borrowers, since it requires no change to monthly cash flow.