Home Loan Prepayment Calculator

Reduce tenure almost always saves more interest. When you cut the loan period, every future month of interest disappears. Reducing EMI keeps the loan running for the same duration — you save interest only on the smaller outstanding balance. Unless monthly cash flow is tight, choose tenure reduction.

One extra EMI per year goes entirely to principal reduction. On a ₹50 lakh loan at 9% for 20 years, paying one extra EMI annually (≈₹45,000/year) can cut your tenure by 4–5 years and save over ₹9 lakh in interest. The key is that every rupee of extra principal paid early eliminates compounding on that amount for all remaining years.

Outstanding principal is the current loan balance you owe — the amount on which interest is being charged. You can find it on your latest bank statement, loan account statement, or by checking your bank app under "loan account details". It is not the original loan amount.

As per RBI guidelines, banks and NBFCs cannot charge foreclosure or prepayment penalty on floating rate home loans. Fixed rate home loans may have a prepayment charge of 2–3% of the prepaid amount. Always check your loan agreement before prepaying.

It depends on your loan interest rate vs investment return. If your home loan rate is 9% and you can earn 12%+ after tax from equity investments, investing wins on returns. But prepayment gives a guaranteed risk-free return equal to your loan rate — which many debt investments cannot match. Also consider: prepayment reduces stress and improves monthly cash flow.

As early as possible — ideally in the first half of the tenure. In the early years, most of your EMI is interest. Every rupee prepaid early eliminates years of compounding on that principal. Prepaying in the last 2–3 years saves very little because the outstanding balance is already small and mostly principal.