Loan Prepayment Calculator: Interest Saved and Tenure Reduction

A loan prepayment calculator estimates how much interest and time you may save by paying extra principal before the scheduled end of the loan.

Use the Loan Pre-payment Calculator to enter outstanding loan amount, interest rate, remaining tenure, one-time prepayment, and optional recurring yearly prepayment.

How prepayment helps

Every EMI has two parts:

• Interest on the outstanding balance
• Principal repayment

When you make a prepayment, the outstanding principal falls immediately. If the EMI stays the same, more of each future EMI can reduce principal faster. This can reduce total interest and close the loan earlier.

One-time prepayment

Revised principal = Outstanding loan amount - one-time prepayment

For example:

• Outstanding loan = Rs 50,00,000
• One-time prepayment = Rs 5,00,000
• Revised principal = Rs 45,00,000

The calculator then continues the repayment schedule using the original EMI.

Recurring yearly prepayment

If you also enter a yearly prepayment, the calculator applies it as extra principal after each completed loan year.

This can model situations such as:

• Annual bonus used for home loan prepayment
• Yearly savings used to reduce principal
• Periodic surplus income applied to a loan

Interest saved formula

Interest saved = Original total interest - Revised total interest

Months saved = Original remaining months - Revised repayment months

The revised schedule keeps EMI unchanged and estimates tenure reduction. Some lenders may instead reduce EMI, reduce tenure, or let you choose.

Related calculators

Use the EMI Calculator to understand the original EMI and amortization table.

Use the Home Loan Calculator when you want to start from property value, down payment, LTV, EMI, and prepayment impact.

Use the Home Loan Eligibility Calculator to estimate how much loan amount your income may support.

Assumptions

• The interest rate is fixed for the estimate.
• One-time prepayment is applied immediately.
• Yearly prepayment is applied after each completed loan year.
• EMI stays the same and tenure reduction is estimated.
• Prepayment charges, lender rules, EMI-reduction choices, floating-rate changes, tax benefits, and processing fees are not included.

Disclaimer

The information and calculations provided on this website are for general informational and educational purposes only. Results are estimates based on user inputs and simplified assumptions and may not reflect actual lender rules, fees, loan statements, or repayment options. This content does not constitute tax, legal, accounting, or financial advice. Consult a qualified financial advisor or lender before making borrowing decisions.