Home loan prepayment and part-payment calculator
A part-payment made early in a home loan removes principal that would otherwise have accrued interest for years. Floating-rate home loans in India carry no prepayment penalty for individuals, so this is the cheapest way to shorten a loan. Enter your current loan and the amount you can prepay.
- Current EMI
- ₹40,746
- Interest without prepayment
- ₹43.01 L
- Interest with prepayment
- ₹20.49 L
- New tenure
- 124 months (10.3 years)
- Tenure reduced by
- 92 months
- Or: new EMI if tenure kept (lump sum only)
- ₹36,218
Copy link to this calculation · JSON API · Estimates only; verify rates with the source below.
How it is calculated
The EMI is held constant. Prepayments reduce the outstanding principal immediately, so each later EMI retires more principal; the loan ends when the balance hits zero. Interest saved = interest on the original schedule − interest on the new one. The alternative shown recomputes the EMI for the original tenure after the lump sum.
Worked example
₹45 lakh outstanding at 8.5% with 216 months left (EMI ₹40,746): a ₹5 lakh prepayment now plus ₹1 lakh every year ends the loan in about 124 months instead of 216 and saves roughly ₹22.5 lakh of interest. Reducing the EMI instead (to ₹36,218) would save far less.
Frequently asked questions
Is it better to reduce EMI or tenure after prepayment?
Reducing tenure saves far more interest; reducing EMI only helps cash flow. Keep the EMI unchanged if you can afford it.
Is there a penalty for prepaying a home loan?
No penalty on floating-rate home loans to individuals per RBI rules. Fixed-rate loans may charge 2–4%; check your sanction letter.
When is prepayment most effective?
In the early years, when the interest share of each EMI is highest. The same ₹5 lakh saves much less in year 15 than in year 2.
Sources and what to verify: RBI circular on foreclosure charges for floating-rate loans.
Estimates for planning only; not financial, legal or tax advice. Figures reflect common practice and published rates as of November 2026. Found an outdated rate? Email hello@zeorent.com.