Loan Prepayment Calculator

See how making extra payments can help you pay off your loan faster and save on interest.

Loan Details
Prepayment Details
Your Savings
Total Interest Saved

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Loan Paid Off Faster By

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Original EMI -
Original Payoff Date -
New Payoff Date -

Why Prepay Your Loan?

Loan prepayment is the process of paying off your loan, or a part of it, before the official due date. Making extra payments towards your loan's principal amount can have a significant positive impact on your financial health. This calculator is designed to show you exactly how powerful prepayment can be.

The Two Main Benefits of Prepayment:
  • Massive Interest Savings: Every extra rupee you pay towards the principal is a rupee you won't have to pay interest on for the rest of the loan's tenure. Over many years, this can add up to lakhs of rupees in savings.
  • Reduced Loan Tenure: By clearing the principal faster, you shorten the life of the loan. This means you can become debt-free months or even years ahead of schedule, freeing up your cash flow for other investments and life goals.

Frequently Asked Questions (FAQ)

Prepayment (or part-payment) involves paying a portion of the outstanding principal. Foreclosure is paying off the entire remaining loan balance at once to close the loan ahead of schedule.

It depends on the loan type and the lender. As per RBI guidelines, lenders cannot charge a penalty for prepaying a floating-rate home loan. However, penalties may apply to fixed-rate home loans and other loan types like personal loans or car loans. Always check your loan agreement or with your bank.

This is a classic financial dilemma. A common rule of thumb is to compare the interest rate on your loan with the potential post-tax returns from your investment. If your loan's interest rate is higher than your expected investment returns, prepaying the loan is generally the safer, more guaranteed 'return'. If you are confident you can earn significantly more from investing, that might be a better option. It's a decision based on your personal risk appetite.