Home Loan Prepayment Calculator
Estimate how a selected extra-payment plan may affect interest and loan tenure. Results use a simplified monthly reducing-balance model; your lender's rate changes, interest method, payment credit date, and contract terms can produce different results. Use the home loan prepayment calculator to compare scenarios.
If you are already mid-way through repayment or your loan is not a home loan, use the Universal Loan Manager for active-loan planning.
What This Home Loan Prepayment Calculator Helps You Do
Choose a monthly extra payment, annual lump sum, or step-up payment scenario. Run each option separately with the same loan inputs to compare the model's estimates.
- Estimated interest and repayment-time differences.
- Revised outstanding balance over time for each strategy.
- Scenario results for the selected strategy. Compare separate runs for other strategies.
Current RBI Prepayment-Charge Rules
RBI's standalone 2025 prepayment notification has been withdrawn. Prepayment-charge instructions are now set out in lender-category-specific RBI Master Directions. Find the direction for your lender and check its scope against your loan date, purpose, rate type, and contract. Read the RBI Master Directions (official index) and confirm how they apply to your account.
How Home Loan Prepayment Saves Interest
With a reducing-balance loan, interest is calculated on the outstanding principal. Reducing that balance earlier can reduce later interest, but the amount depends on payment timing, rate changes, and how the lender adjusts EMI or tenure.
A lender statement or revised amortization schedule is the best way to confirm the effect of an actual payment.
What Makes This Calculator Different
- Model one monthly, annual lump-sum, or step-up strategy at a time.
- See estimated interest and repayment-time differences together.
- Adjust assumptions and compare separate scenarios.
- Account for lender-specific charges separately; this calculator does not determine legal fee eligibility.
The estimate assumes a constant annual rate converted to a monthly rate, monthly payments, and immediate principal reduction in the modeled month. It does not model daily interest accrual, rate resets, lender fees, tax effects, or the lender's actual payment-posting process. The modeled extra payment is applied after that month's interest is calculated.
Important Note
All calculations are illustrative estimates based on the inputs provided. Actual savings depend on your lender's amortization method and loan terms. Always confirm with your bank before making large prepayments.
What to weigh before making an extra payment
Liquidity
Money paid into a loan may not be readily available again. Keep near-term expenses and an emergency reserve in view.
Loan terms
Ask whether your lender will reduce the EMI or tenure, what charges apply to your loan, and when a payment will reduce principal.
Tax position
Any tax deduction depends on the tax regime and property and loan facts. This calculator does not estimate tax deductions.
Investment comparison
Compare prepayment with investment using post-tax assumptions and your risk tolerance. A loan-rate saving and an investment return are different measures; market returns are uncertain.
Compare Prepayment Strategies: Choose Your Approach
Monthly Extra Payment
SteadyAdd a fixed extra amount to your EMI every month. Ideal for consistent cash flow.
✓Can reduce modeled interest when applied to principal
✓Fits a regular surplus if your lender accepts the payment schedule
✓Compare its estimated effect with other scenarios
Consider when: You can make regular extra payments under your loan terms
Lump Sum
ImpactfulMake one large payment annually, typically from bonus or windfall gains.
✓Models one extra payment in a selected month each year
✓Can model a bonus or another available lump sum
✓Check lender payment windows and posting dates
Consider when: You have a lump sum available after near-term needs
Step-Up
GrowingIncrease your total EMI by a percentage each year, matching salary growth.
✓Models an EMI increase once each year
✓Lets you compare planned payment increases
✓Use only an increase that fits your budget
Consider when: You expect and can afford planned increases
Frequently Asked Questions
Where can I find the current RBI prepayment charge rules?
RBI prepayment-charge instructions are set out in Master Directions for different lender categories. Find the direction that applies to your lender, then check its scope against your loan dates, purpose, rate type, and loan documents.
Can I make monthly part-payments?
That depends on your loan terms and lender process. Minimum amounts, frequency, payment channels, and the date a payment is credited to principal are lender- and product-specific. Confirm these details with your lender before setting a recurring payment.
What saves more interest — EMI increase or prepayment?
The result depends on when each extra amount reaches principal and how the lender recalculates the loan. With the same total extra cash and otherwise identical assumptions, earlier principal reduction generally lowers interest, but use your lender’s amortization rules to compare the options.
Can I compare monthly and lump-sum prepayments?
Yes. Choose one strategy at a time in this calculator and compare scenarios using the same loan inputs. It does not combine multiple strategies in one run.
How much can I save by prepaying ₹1 Lakh?
There is no single figure: savings depend on the outstanding balance, rate, remaining tenure, payment date, and how your lender applies the payment. Enter your loan details in the calculator for an estimate, then compare it with a revised schedule from your lender.
Should I reduce EMI or tenure after prepayment?
If your lender lets you keep the EMI unchanged and shortens the tenure, that usually results in less total interest than reducing the EMI while keeping the original tenure, assuming the same rate and payment timing. Reducing EMI may be more useful when you need lower monthly payments.
Should I prepay a home loan or invest through an SIP?
Compare the loan’s after-tax cost and any prepayment fee with an uncertain, post-tax investment outcome. The result depends on your loan terms, tax position, time horizon, liquidity needs, and risk tolerance. Investment returns are not guaranteed.
Does prepayment change home-loan tax deductions?
It can reduce the interest or principal amounts that may qualify for deductions. Eligibility depends on the tax regime, property use, ownership, loan purpose, and other statutory conditions. Under the new tax regime, interest deduction for a self-occupied property under Section 24(b) is not available. See the Income Tax Department guidance and consult a tax professional for your case.
Official references: RBI Master Directions index and the Income Tax Department tax-regime FAQ.
Related Calculators & Guides
Explore more tools and guides to optimize your home loan and financial planning.
Bank-Specific Prepayment Rules
Lender process, payment limits, and applicable charges can depend on the product and loan terms. Review lender sources for SBI, HDFC, ICICI, Kotak, and other banks.
Compare all bank prepayment rules →