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Home Loan Prepayment Calculator — Save Lakhs in Interest
Find out exactly how much interest you save and how many months you eliminate by making a lump-sum prepayment on your home loan today.
Educational calculators — always consult a licensed professional before making financial decisions.
The total home loan amount you originally borrowed.
Your current home loan interest rate per annum.
Total duration of the loan when it was sanctioned.
How many years have passed since your loan started.
The lump-sum amount you plan to pay towards your loan principal.
Reducing tenure saves more interest. Reducing EMI gives immediate cash flow relief.
Same EMI, loan ends earlier. More interest saved.
Interest Saved
₹14.88 L
By prepaying ₹5 L now
Summary
Estimates assume no prepayment penalty (RBI mandates zero prepayment charges on floating rate home loans). Fixed-rate loans may have foreclosure charges. Verify with your bank.
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What you'll need
- ·Original loan amount and interest rate
- ·Loan tenure (years)
- ·How many years into the loan you are
- ·Prepayment amount (lump sum)
What you'll get
- ✓Interest saved — Total interest eliminated by prepaying
- ✓Months saved — How much sooner the loan is closed
- ✓Reduce EMI vs tenure — Compare both prepayment strategies
How it works
Enter your loan details
Provide your original loan amount, interest rate, and tenure.
Enter prepayment details
Specify how many years in you are and the lump sum you want to prepay.
Choose your goal
Select whether you want to reduce your EMI or reduce your loan tenure — and see the interest saved.
Interest Saved by Prepayment Amount (₹50L loan, 8.75%, 20yr, Year 5)
| Prepayment Amount | Interest Saved | Time Saved | Effective Return |
|---|---|---|---|
| ₹1 Lakh | ~₹1.8L | ~6 months | ~180% |
| ₹2 Lakh | ~₹3.4L | ~1 year | ~170% |
| ₹5 Lakh | ~₹7.9L | ~2.5 years | ~158% |
| ₹10 Lakh | ~₹14L | ~4.5 years | ~140% |
Effective return = interest saved / prepayment amount. Higher than most fixed deposits since savings are tax-free (on floating loans).
Authoritative resources
About this calculator
Is there a penalty for prepaying a home loan in India?+
No. As per RBI guidelines, banks cannot charge prepayment penalties on floating rate home loans. Fixed rate loans may have prepayment charges of 2–3% of the outstanding principal. Always check your loan agreement before prepaying.
Should I reduce EMI or reduce tenure when I prepay?+
Reducing tenure saves more interest in total because the loan is paid off faster. Reducing EMI gives you immediate monthly cash flow relief. Most financial advisors recommend reducing tenure if you can manage the current EMI, as the total interest saving is significantly higher.
What is the best time to make a prepayment on a home loan?+
The earlier in the loan tenure you prepay, the more interest you save. In the initial years, most of the EMI goes toward interest rather than principal, so prepaying early has a disproportionately large impact. Prepaying in Year 2–5 typically saves 2–4x the prepayment amount in interest over the remaining tenure.
Is prepaying a home loan better than investing in mutual funds?+
If your home loan rate is 8.75%, prepaying gives you a guaranteed, tax-free return equivalent to that rate. Mutual funds may offer higher long-term returns (10–12% for equity) but with market risk. If you are in the 30% tax bracket and have fully utilized your 80C/24(b) tax benefits, investing in equity may outperform prepayment over 7+ years.
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Back to the calculator ↑Home Loan Prepayment Calculator is built and maintained by the RealCostIQ editorial team. Cost ranges and rates are checked against published industry data and contractor quotes, and revised when the underlying figures move. Read our data methodology or more about who builds this. Every calculation runs in your browser — no account, and none of your inputs are stored.
Cost ranges and rates here are checked against contractor quotes and published industry data. If a number still looks off, email Support@RealCostIQ.com and we'll review and fix it.