Should you put extra money into your home loan or invest it? Compare simplified scenarios using your assumptions for the loan, payment plan, taxes, and investment return. The results are estimates and do not predict which choice will perform better.
Compare two strategies for your extra cash: prepaying your home loan to save interest and become debt-free faster, or investing via SIP to potentially build a larger corpus. See month-by-month projections, net worth comparison, and find the break-even point.
= Fifty Lakh Rupees
Monthly EMI
₹43,391
= Ten Thousand Rupees
Extra amount added to EMI every month
Equivalent monthly investment for SIP: ₹10,000
This amount will be used for SIP comparison
Scenario input only; the calculator divides this rate by 12 and applies the same monthly return throughout. It is not a forecast.
Higher modeled balance at original loan end
📈 SIP Investment
Modeled difference
₹1.00 Cr
Break-even: SIP catches up at month 2 (Year 1)
Scenario output only. It excludes investing cash freed after the prepayment path closes early, so it is not a complete net-worth comparison or recommendation.
Interest Saved
₹21.79 L
Time Saved
7 years 2 months
Loan Closed In
12 years 11 months
Total Paid (EMI + Prepayment)
₹82.35 L
Final Corpus
₹1.00 Cr
Total Invested
₹24.10 L
Gains
₹75.91 L
Net worth = Assets (SIP corpus) - Liabilities (Loan balance). Prepayment path shows faster debt reduction; SIP path shows corpus growth alongside loan repayment.
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This calculator simulates two parallel scenarios month-by-month:
The displayed difference compares these modeled paths at the original loan end. The prepayment path is shown as zero after payoff and does not invest released EMI or extra payments, so this is not a full net-worth comparison.
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Compare your actual loan cost and fees with a range of uncertain, post-tax investment scenarios. This tool uses simplified monthly loan and investment assumptions, and its prepayment path does not invest payments freed after the loan closes early, so the model output is not a complete net-worth comparison.
The optional tax estimate applies one user-entered rate and one exemption to total modeled SIP gains. It is not a lot-by-lot or annual tax calculation, and actual tax depends on asset type, holding period, tax year, and your circumstances. Loan interest deductions that may change after prepayment are not modeled.
The break-even month is when modeled SIP net worth first exceeds the modeled prepayment path. Because this version excludes investment of payments freed after early loan closure, treat the date as an illustration rather than an exact financial break-even.
Prepayment can reduce future interest under your loan terms, but the benefit is not automatically an investment yield equal to the stated rate. Rate resets, fees, payment timing, and tax deductions can change the result. SIP returns are uncertain.
Many people choose to allocate extra cash between debt reduction and investing. This calculator compares a selected prepayment strategy with investing an equivalent modeled cash amount; it does not optimize a split or model both actions in one path.
Inflation changes the purchasing power of future amounts. This calculator deflates modeled values using one input rate; it does not forecast inflation, loan-rate changes, or changes in your income.
Disclaimer: This calculator provides estimates for educational purposes only. Actual returns on investments can vary significantly. Loan terms and prepayment options depend on your lender's policies. Tax laws may change. Consult a financial advisor before making major financial decisions.
Compare the interest and any fees under your lender's actual repayment terms with investment outcomes across several assumptions, after applicable taxes and costs. The loan rate, tax eligibility, payment timing, investment risk, and access to cash can all change the result. No single rate threshold predicts which choice will be better for everyone.
The standalone RBI prepayment notification issued in 2025 has been withdrawn. Its prepayment-charge instructions are now set out in lender-category-specific Master Directions. Find the direction for your lender and check its scope against the loan purpose, sanction or renewal date, and rate type on the payment date. Open the RBI Master Directions index.
Confirm the latest lender process for your loan: eligible payment channels, minimums or frequency, payment posting date, any applicable charges, and whether you can choose a lower EMI or shorter tenure.
It depends on your loan, lender, and applicable rules. RBI prepayment-charge instructions are set out in lender-category-specific Master Directions. Find the direction for your lender and check the loan purpose, sanction or renewal date, rate type on the payment date, and your loan documents.
Compare the loan cost and any fee with a range of possible, post-tax investment outcomes. The result depends on your loan terms, tax eligibility, investment risk, time horizon, and need for accessible cash. An assumed market return is not guaranteed, and there is no universal rate at which one choice always wins.
Index returns vary with the start and end dates and do not predict future results. This calculator uses the return assumption you enter; it does not forecast Nifty 50 performance. Compare several scenarios and account for taxes, costs, and the possibility of losses.
It may: a lower balance can reduce the interest paid, which may change a deduction you are eligible to claim. Eligibility and limits depend on the property, loan, and tax regime. The Income Tax Department says the Section 24(b) interest deduction for a self-occupied property is not available under the new tax regime. See the official tax guidance and confirm your circumstances.
Your tax bracket alone does not determine the answer. Check whether you can actually claim a home-loan deduction, how prepayment changes that claim, the investment tax treatment, and whether the potential return compensates for market risk. Compare your own figures and scenarios rather than relying on a fixed post-tax rate.
First consider whether you have enough accessible savings for near-term needs and whether higher-cost debt should be addressed. Then compare the lender’s revised repayment schedule and any charges with a range of investment outcomes after tax and costs. Prepayment reduces debt; investment returns can rise or fall. Keep enough liquidity for your circumstances.
You can allocate money to both, based on your cash needs and risk tolerance. This calculator models one strategy at a time and does not calculate a combined plan. Run each option with consistent inputs, then use your lender’s schedule to check how actual payments affect the loan.
This calculator is for informational and educational purposes only. Results are estimates based on assumed returns and may not reflect actual outcomes. Consult a SEBI-registered financial advisor before making investment decisions.