How to use the Loan Prepayment Calculator
- Enter the outstanding loan, rate and remaining tenure.
- Enter the amount you want to prepay.
- Choose reduce tenure or reduce EMI.
- See the interest you save.
Reduce tenure or reduce EMI?
Keeping the same EMI and reducing the tenure saves the most interest, because the loan is closed earlier. Reducing EMI gives more monthly cash flow but saves less. Prepaying in the early years of a loan has the biggest effect, since most of each EMI then goes towards interest.
Prepayment charges
RBI rules do not allow banks to charge prepayment penalties on floating-rate home loans taken by individuals. Fixed-rate loans and some personal loans may carry a charge of 2-5%.
Frequently asked questions
Is it good to prepay a home loan?
If your loan rate is higher than the after-tax return you would earn by investing, prepaying is usually a good idea. Keep an emergency fund before you prepay.
Are there charges for home loan prepayment?
Not on floating-rate home loans for individuals. Check your loan agreement for fixed-rate loans.
These tools give estimates for general guidance and are not financial or tax advice. Rates and rules can change; check official sources before making decisions.