Loan Prepayment & Tenure Reduction Calculator
Calculate interest savings, tenure reduction, and compare prepayment strategies vs investment options. Make informed decisions about loan prepayments.
Current Loan Details
Prepayment Strategy
Prepayment Details
Investment Comparison (Optional)
Smart Financial Decision!
You'll save ₹15,07,201 by following this prepayment strategy.
Without Prepayment
With Prepayment
Recommendation: By following this prepayment strategy, you'll save ₹15,07,201 and close your loan 3.8 years earlier.
Total EMI Paid
₹78,97,191
Total Principal Paid
₹49,00,489
Total Interest Paid
₹34,75,496
Total Interest Saved
₹15,17,201
Net Cost After Savings
₹68,68,783
| Year | Opening Balance | EMI Paid | Prepayment | Interest | Principal | Closing Balance | Interest Saved |
|---|---|---|---|---|---|---|---|
| Year 1 | ₹49,00,489 | ₹5,20,694 | ₹5,00,000 | ₹3,94,426 | ₹1,26,268 | ₹42,74,220 | -₹1,44,791 |
| Year 2 | ₹42,74,220 | ₹5,20,694 | ₹0 | ₹3,57,030 | ₹1,63,664 | ₹41,10,556 | -₹2,52,186 |
| Year 3 | ₹41,10,556 | ₹5,20,694 | ₹0 | ₹3,42,564 | ₹1,78,130 | ₹39,32,426 | -₹3,45,115 |
| Year 4 | ₹39,32,426 | ₹5,20,694 | ₹0 | ₹3,26,819 | ₹1,93,875 | ₹37,38,551 | -₹4,22,299 |
| Year 5 | ₹37,38,551 | ₹5,20,694 | ₹0 | ₹3,09,682 | ₹2,11,012 | ₹35,27,539 | -₹4,82,346 |
| Year 6 | ₹35,27,539 | ₹5,20,694 | ₹0 | ₹2,91,030 | ₹2,29,664 | ₹32,97,875 | -₹5,23,741 |
| Year 7 | ₹32,97,875 | ₹5,20,694 | ₹0 | ₹2,70,730 | ₹2,49,964 | ₹30,47,911 | -₹5,44,837 |
| Year 8 | ₹30,47,911 | ₹5,20,694 | ₹0 | ₹2,48,636 | ₹2,72,058 | ₹27,75,853 | -₹5,43,838 |
| Year 9 | ₹27,75,853 | ₹5,20,694 | ₹0 | ₹2,24,588 | ₹2,96,106 | ₹24,79,747 | -₹5,18,791 |
| Year 10 | ₹24,79,747 | ₹5,20,694 | ₹0 | ₹1,98,415 | ₹3,22,279 | ₹21,57,468 | -₹4,67,571 |
| Year 11 | ₹21,57,468 | ₹5,20,694 | ₹0 | ₹1,69,929 | ₹3,50,765 | ₹18,06,703 | -₹3,87,865 |
| Year 12 | ₹18,06,703 | ₹5,20,694 | ₹0 | ₹1,38,924 | ₹3,81,770 | ₹14,24,933 | -₹2,77,154 |
| Year 13 | ₹14,24,933 | ₹5,20,694 | ₹0 | ₹1,05,179 | ₹4,15,515 | ₹10,09,418 | -₹1,32,698 |
| Year 14 | ₹10,09,418 | ₹5,20,694 | ₹0 | ₹68,451 | ₹4,52,243 | ₹5,57,176 | ₹48,485 |
| Year 15 | ₹5,57,176 | ₹5,20,694 | ₹0 | ₹28,477 | ₹4,92,217 | ₹64,959 | ₹2,69,643 |
| Year 16 | ₹64,959 | ₹86,782 | ₹0 | ₹616 | ₹64,959 | ₹0 | ₹3,10,632 |
Pay Extra Every Month
Small consistent payments work best for long-term savings
Use Bonuses Wisely
Annual lump sums reduce tenure significantly
Prepay Early
Maximum impact in first 5 years of loan
Balance with Investments
Don't deplete emergency fund for prepayments
Prepayment Timing
Earlier = More Savings
The sooner you prepay, the greater the interest savings. First 5 years have maximum impact.
Prepayment Amount
Larger = Higher Impact
Bigger prepayments reduce principal faster, compounding your interest savings over time.
Interest Rate
Higher Rate = More Benefit
Prepaying high-interest loans (>10%) provides maximum guaranteed returns on your money.
Start Prepaying Early
Begin prepayments within the first 5 years for maximum interest savings
Pay Rounded-Up EMIs
Round up your EMI to nearest thousand for consistent prepayments
Use Annual Bonuses
Allocate 30-50% of bonuses toward loan prepayment for big impact
Check Foreclosure Charges
Verify prepayment penalties with your lender before making large payments
Maintain Emergency Fund
Keep 6 months EMI as emergency fund before aggressive prepayments
Track Your Progress
Monitor outstanding balance regularly to stay motivated
Example 1: Aggressive Early Prepayment
Loan: ₹50L home loan
Tenure: 20 years
Interest Rate: 8.5%
Strategy: ₹50,000 prepayment every year for 5 years
Interest Saved: ₹18.2L
Tenure Reduced: 6 years early
New Closure: In 14 years instead of 20
Key Insight: Early aggressive prepayments provide maximum impact, saving nearly 40% of total interest.
Example 2: Moderate Monthly Extra Payment
Loan: ₹30L car loan
Tenure: 7 years
Interest Rate: 9%
Strategy: Pay ₹2,000 extra every month
Interest Saved: ₹3.8L
Tenure Reduced: 2 years early
New Closure: In 5 years instead of 7
Key Insight: Consistent small extra payments add up significantly over time, reducing both interest and tenure.
Example 3: Bonus-Based Prepayment
Loan: ₹20L personal loan
Tenure: 5 years
Interest Rate: 12%
Strategy: Use annual bonus (₹1L) for prepayment
Interest Saved: ₹4.2L
Tenure Reduced: 1.5 years early
New Closure: In 3.5 years instead of 5
Key Insight: Using bonuses strategically on high-interest loans provides excellent guaranteed returns.
When to Prepay
High Interest Loan
Interest rate above 10%
No Foreclosure Charges
Or minimal charges (<1%)
Emergency Fund Covered
6 months expenses saved
No Better Investments
Can't beat loan rate safely
When NOT to Prepay
Low Interest Loan
Interest rate below 7%
High Foreclosure Charges
Charges above 2%
Better Investment Returns
Safe options beating loan rate
Need Funds for Goals
Important financial goals pending
Advantages of Prepayment
Guaranteed Interest Savings
Risk-free returns equal to your loan rate
Tenure Reduction
Become debt-free earlier than planned
Debt Freedom
Peace of mind and financial flexibility
Improved Credit Score
Lower debt burden improves creditworthiness
Future Loan Eligibility
Higher eligibility for future borrowing
Disadvantages to Consider
Liquidity Impact
Money locked in; can't access in emergencies
Opportunity Cost
Might miss better investment opportunities
Tax Benefit Loss
Home loan interest up to ₹2L deductible under 80C
Foreclosure Fees
Some lenders charge 2-3% on prepayment
Impact on Other Goals
May delay other financial objectives