Loan Optimizer
Loan Prepayment Calculator
See how much interest you save and how many years you cut by making smart prepayments on your loan.
Loan Details
Prepayment Strategy
Results
Key Insight
A one-time prepayment of ₹2.00 L in Year 2 saves you ₹7.29 L in interest and reduces your loan tenure by 1 Year 9 Months. Your total repayment drops from ₹1.04 Cr to ₹96.84 L.
Outstanding Loan Balance
See how your balance drops faster with prepayment
Year-by-Year Interest Comparison
Interest paid each year with and without prepayment
Comparison Summary
Side-by-side: Without vs With Prepayment
| Metric | Without Prepayment | With Prepayment | Benefit |
|---|---|---|---|
| Total Interest Paid | ₹54.14 L | ₹46.84 L | ₹7.29 L saved |
| Total Amount Paid | ₹1.04 Cr | ₹96.84 L | ₹7.29 L less |
| Loan Tenure | 20 Yrs 0 Mo | 18 Yrs 3 Mo | 1 Year 9 Months saved |
| Monthly EMI | ₹43,391 | ₹43,391 | Same EMI |
| Total Prepayment | --- | ₹2.00 L | 365% return on prepayment |
Year-by-Year Amortization
With prepayment schedule showing principal, interest, and prepayments
| Year | Opening | Principal | Interest | Prepaid | Closing |
|---|---|---|---|---|---|
Yr 1 | ₹50.00 L | ₹99,511 | ₹4.21 L | --- | ₹49.00 L |
Yr 2Prepaid | ₹49.00 L | ₹1.26 L | ₹3.95 L | ₹2.00 L | ₹45.75 L |
Yr 3 | ₹45.75 L | ₹1.37 L | ₹3.84 L | --- | ₹44.37 L |
Yr 4 | ₹44.37 L | ₹1.49 L | ₹3.71 L | --- | ₹42.88 L |
Yr 5 | ₹42.88 L | ₹1.62 L | ₹3.58 L | --- | ₹41.26 L |
Yr 6 | ₹41.26 L | ₹1.77 L | ₹3.44 L | --- | ₹39.49 L |
Yr 7 | ₹39.49 L | ₹1.92 L | ₹3.28 L | --- | ₹37.56 L |
Yr 8 | ₹37.56 L | ₹2.09 L | ₹3.11 L | --- | ₹35.47 L |
Yr 9 | ₹35.47 L | ₹2.28 L | ₹2.93 L | --- | ₹33.19 L |
Yr 10 | ₹33.19 L | ₹2.48 L | ₹2.73 L | --- | ₹30.71 L |
Yr 11 | ₹30.71 L | ₹2.70 L | ₹2.51 L | --- | ₹28.01 L |
Yr 12 | ₹28.01 L | ₹2.94 L | ₹2.27 L | --- | ₹25.07 L |
Yr 13 | ₹25.07 L | ₹3.20 L | ₹2.01 L | --- | ₹21.87 L |
Yr 14 | ₹21.87 L | ₹3.48 L | ₹1.73 L | --- | ₹18.39 L |
Yr 15 | ₹18.39 L | ₹3.79 L | ₹1.42 L | --- | ₹14.60 L |
Yr 16 | ₹14.60 L | ₹4.12 L | ₹1.08 L | --- | ₹10.48 L |
Yr 17 | ₹10.48 L | ₹4.49 L | ₹71,851 | --- | ₹5.99 L |
Yr 18 | ₹5.99 L | ₹4.89 L | ₹32,177 | --- | ₹1.11 L |
Yr 19 | ₹1.11 L | ₹1.11 L | ₹1,441 | --- | Loan Closed |
| Total | --- | ₹48.00 L | ₹46.84 L | ₹2.00 L | --- |
Calculator results are for illustration purposes only. Actual returns may vary based on market conditions, fund performance, and other factors. Mutual fund investments are subject to market risks. Read all scheme-related documents carefully before investing. Past performance does not guarantee future returns.
Prepay the loan or invest the money? The comparison that settles it
When you have a surplus, one of the most common dilemmas is whether to prepay a loan or invest the money. Prepaying earns you a guaranteed, risk-free saving equal to your loan interest rate; investing might earn more, but with market risk and no guarantee. The maths is only half of it — being debt-free has a real psychological value that a spreadsheet cannot capture.
This calculator shows the interest you save and the tenure you cut by prepaying, and compares that against investing the same amount at an expected return. As a rule, prepaying early in the loan saves the most, because early EMIs are mostly interest — and prepaying makes an especially strong case when your loan rate is higher than what you could confidently earn after tax elsewhere.
How this calculator works
- 1Enter your loan balance, interest rate, remaining tenure and the prepayment amount.
- 2The calculator shows the interest saved and the reduction in tenure (or EMI).
- 3Compare that guaranteed saving against investing the same amount at your expected return.
Frequently asked questions
Should I prepay my loan or invest the money?
Compare your loan’s interest rate with the return you could confidently earn after tax elsewhere. If the loan rate is higher than a realistic after-tax investment return, prepaying gives a guaranteed saving and usually wins. If you can reliably earn more by investing and value liquidity, investing may edge ahead — but it carries risk that prepaying does not.
When is the best time to prepay a loan?
As early as possible. Because early EMIs are mostly interest, a prepayment in the first years removes far more total interest than the same amount later, when the balance is small and mostly principal. Prepaying early also shortens the tenure the most.
Does prepayment attract a penalty?
Floating-rate home loans to individuals generally cannot carry prepayment penalties in India, but fixed-rate loans and some other loan types may. Check your loan agreement before making a large prepayment so the penalty (if any) does not erode the interest you save.
Illustrative only; investment returns are not guaranteed, loan savings are.
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