Loan Prepayment / Foreclosure Calculator
Find out how much a one-time prepayment saves you in interest — and why cutting the tenure usually beats cutting the EMI.
15 yr
Interest saved
₹9,43,195
Loan closes 4 yr 10 mo sooner.
Interest saved
48.84%
“Prepay now. Breathe lighter forever.”
Repayment schedule after prepayment
Early years are mostly interest; later years mostly principal. Total interest ₹9,88,133 on ₹20,00,000 borrowed.
| Year | Principal paid | Interest paid | Total payment | Balance left |
|---|---|---|---|---|
| 1 | ₹1,30,425 | ₹1,64,997 | ₹2,95,422 | ₹18,69,575 |
| 2 | ₹1,41,954 | ₹1,53,468 | ₹2,95,422 | ₹17,27,621 |
| 3 | ₹1,54,501 | ₹1,40,921 | ₹2,95,422 | ₹15,73,120 |
| 4 | ₹1,68,158 | ₹1,27,264 | ₹2,95,422 | ₹14,04,962 |
| 5 | ₹1,83,021 | ₹1,12,401 | ₹2,95,422 | ₹12,21,941 |
| 6 | ₹1,99,199 | ₹96,223 | ₹2,95,422 | ₹10,22,742 |
| 7 | ₹2,16,806 | ₹78,616 | ₹2,95,422 | ₹8,05,936 |
| 8 | ₹2,35,970 | ₹59,452 | ₹2,95,422 | ₹5,69,966 |
| 9 | ₹2,56,827 | ₹38,595 | ₹2,95,422 | ₹3,13,139 |
| 10 | ₹2,79,529 | ₹15,893 | ₹2,95,422 | ₹33,611 |
| 11 | ₹33,611 | ₹303 | ₹33,914 | ₹0 |
Lowest home loan rates right now
See all bank rates →#1
7.10%
Bank of India
Rates page ↗#2
7.15%
LIC Housing
Rates page ↗#3
7.15%
Canara Bank
Rates page ↗#4
7.20%
Bank of Baroda
Rates page ↗#5
7.30%
State Bank of India
Rates page ↗
Rates updated as of 28 Jul 2026 · p.a. · Confirm with the bank before investing.
Prepayment tips
- Prepay as early in the tenure as you can — that's when interest makes up most of each EMI.
- Choose "reduce tenure" over "reduce EMI" to maximise interest saved.
- Confirm foreclosure/prepayment charges with your lender before making a large payment.
How it's calculated
Starting from your outstanding loan, we:
- derive your current EMI from the outstanding amount, rate and remaining tenure;
- compute the baseline interest you'd pay with no prepayment (EMI × months − principal);
- Reduce tenure: keep the same EMI and amortize the lower balance month-by-month to find the new, shorter tenure;
- Reduce EMI: keep the same tenure and compute a new, lower EMI.
Interest saved = baseline interest − new interest. Reducing the tenure almost always saves more interest than reducing the EMI, because you clear the principal faster.
Example
On a ₹20,00,000 loan outstanding at 9% with 15 years (180 months) remaining, a one-time ₹2,00,000 prepayment applied to reduce the tenure cuts it to about 147 months (12.3 years) — roughly 2.75 years shorter — and saves approximately ₹4,78,224 in total interest.
About loan prepayment
Prepayment (or foreclosure, if it clears the loan entirely) means paying extra toward your loan principal beyond the scheduled EMI. Because interest is calculated on the outstanding balance, any amount that reduces that balance sooner reduces every future interest calculation too — which is why even a modest prepayment can save a disproportionately large amount over a long loan.
How it works
A prepayment reduces your outstanding principal immediately. From there, you have two choices: keep the same EMI and let the loan finish sooner (reduce tenure), or keep the same tenure and pay a smaller EMI each month (reduce EMI). Both save interest compared to not prepaying at all — but not by the same amount.
How to use this calculator
- Enter your current outstanding principal, interest rate, and remaining tenure.
- Set the prepayment amount you're considering.
- Compare "reduce tenure" against "reduce EMI" to see the interest-saved difference directly.
Strategies worth knowing
- Reduce tenure beats reduce EMI — for the same prepayment amount, cutting the tenure (keeping the EMI fixed) almost always saves more total interest than lowering the EMI, because it clears principal faster.
- Prepay early — a prepayment made in year 2 of a 20-year loan saves far more than the same amount prepaid in year 15, since more interest-bearing years remain.
- Check for prepayment charges — some loans (especially fixed-rate ones) charge a penalty for prepayment; floating-rate home loans in India generally don't, by regulation, but always confirm.
Important caveats
- This calculator assumes a fixed interest rate for the remaining tenure — a floating-rate loan's actual savings will differ if rates change.
- It doesn't account for any prepayment penalty your lender might charge — check your loan terms first.
- Home loan interest may carry tax benefits (Sections 24/80C) that a prepayment reduces going forward — factor that into your decision if tax savings matter to you.
Why reducing tenure saves more
Keeping the EMI the same after a prepayment means every future payment still allocates a large chunk to principal (since the EMI amount hasn't shrunk), which pays down the loan faster and cuts off interest-accruing months earlier. Reducing the EMI instead spreads the benefit out as lower payments over the same remaining time — interest still accrues for just as long, so the total interest saved is smaller.
Benefits
- Can save a substantial amount of interest, especially on large, long-tenure loans like home loans.
- Reduces your total debt exposure and interest-rate risk sooner.
- Gives you a concrete way to compare "reduce tenure" vs. "reduce EMI" before deciding.
Home loan rates — top banks
Rates updated as of 28 Jul 2026
| Bank | Rate (p.a.) | Tenure | Notes |
|---|---|---|---|
| Bank of India | 7.10% | Starting rate for eligible profiles | Starting rate for eligible profiles |
| LIC Housing | 7.15% | Starting rate for eligible profiles | Starting rate for eligible profiles |
| Canara Bank | 7.15% | Starting rate for eligible profiles | Starting rate for eligible profiles |
| Bank of Baroda | 7.20% | Starting rate for eligible profiles | Starting rate for eligible profiles |
| State Bank of India | 7.30% | Starting rate for eligible profiles | Starting rate for eligible profiles |
| ICICI Bank | 7.50% | Starting rate for eligible profiles | Starting rate for eligible profiles |
| HDFC Bank | 7.75% | Starting rate for eligible profiles | Starting rate for eligible profiles |
| Axis Bank | 8.00% | Starting rate for eligible profiles | Starting rate for eligible profiles |
| Punjab National Bank - PNB | 8.25% | Starting rate for eligible profiles | Starting rate for eligible profiles |
Frequently asked questions
Does prepaying a loan really save money?
Yes. A prepayment reduces the outstanding principal, so less interest accrues over the remaining loan. The earlier in the tenure you prepay, the more interest you save, because more of each early EMI is interest.
Should I reduce the tenure or the EMI?
Reducing the tenure while keeping the same EMI almost always saves more interest, because you clear the principal faster. Reducing the EMI eases monthly cash flow but saves less overall. The calculator shows both so you can compare.
Are there charges for prepaying a loan?
Floating-rate home loans to individuals generally cannot be charged a prepayment penalty, but fixed-rate loans and some other loan types may attract charges. Check your loan agreement and confirm any foreclosure charges with your lender.
What is loan foreclosure?
Foreclosure means repaying the entire outstanding balance in one go and closing the loan early. If your prepayment equals or exceeds the outstanding principal, this calculator treats the loan as fully closed.
When is prepayment most worth it?
Prepayment is most valuable early in a long-tenure loan, when the outstanding balance (and therefore the interest accruing on it) is largest. Prepaying the same amount in the final years of the loan saves comparatively little, since most of the interest has already been paid.
Should I prepay a loan or invest the money instead?
It depends on your loan's interest rate versus your expected investment return. If your loan rate is higher than what you'd realistically earn investing (after tax), prepaying is the safer, guaranteed "return." If your investment return is likely higher and you have room for risk, investing may work out better — but prepayment is a certain outcome, while investment returns aren't.
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