Loan Prepayment Calculator
Discover how much interest and time you can save by paying just a little bit extra each month.
Amount you will pay every month *in addition* to your base EMI.
Base Monthly EMI
₹43,391
New Total Monthly Payment
₹48,391
Massive Savings Unlocked!
By paying just ₹5,000 extra per month, you will save:
₹13,89,250
In Interest
4 Yrs 5 Mos
In Time
Summary
What is the Loan Prepayment Calculator?
The KagazKit Loan Prepayment Calculator shows you exactly how much interest you can save by making extra payments on your loan. When you make a lump sum prepayment or increase your monthly EMI, the principal reduces faster, which dramatically cuts down the total interest paid over the loan lifetime. This calculator compares your loan with and without prepayments — showing the interest saved, tenure reduction, and effective savings that could amount to lakhs of rupees on a typical home loan.
How to Use This Tool
- 1Enter your loan details — Input the original loan amount, annual interest rate, and total loan tenure in years.
- 2Add prepayment details — Specify the lump sum prepayment amount and when you plan to make it (after how many months/years).
- 3Compare scenarios — The calculator shows a side-by-side comparison of total interest with and without prepayment.
- 4Review your savings — See the exact rupee amount saved in interest and the number of months/years the loan tenure is reduced by.
Why Use This Tool?
- ✓Compare loan cost with and without prepayments
- ✓Shows exact interest savings in rupees
- ✓Calculates tenure reduction from prepayment
- ✓Supports lump sum and recurring extra payment scenarios
- ✓Real-time calculation as you adjust inputs
- ✓Completely private — your loan data stays in your browser
Common Use Cases
- Home loan borrowers deciding whether to use a bonus or windfall to prepay their mortgage and how much interest it would save.
- Comparing the benefit of increasing monthly EMI by ₹5,000-10,000 vs making a one-time lump sum prepayment.
- Planning optimal prepayment timing — understanding whether prepaying early in the loan tenure saves more than prepaying later.
- Evaluating whether to invest surplus funds in mutual funds or use them to prepay a home loan based on interest rate comparison.
Frequently Asked Questions
How does loan prepayment save interest?
When you make a prepayment, the lump sum directly reduces the outstanding principal. Since interest is calculated on the remaining principal, a lower principal means lower interest charges in every subsequent EMI. The earlier you prepay, the more interest you save because there are more remaining EMIs that benefit from the reduced principal.
Is it better to reduce EMI or reduce tenure after prepayment?
Reducing tenure (keeping the same EMI) saves significantly more total interest because you pay off the loan faster. Reducing EMI (keeping the same tenure) gives you immediate monthly cash flow relief but results in more total interest paid. For maximum savings, choose tenure reduction.
Are there penalties for prepaying a loan?
For home loans with floating interest rates, RBI guidelines prohibit banks from charging prepayment penalties. For fixed-rate home loans and personal loans, banks may charge 2-4% of the prepaid amount as a penalty. Always check your loan agreement before prepaying.
When is the best time to prepay a loan?
The earlier the better. In the initial years of a loan, a larger portion of your EMI goes toward interest (not principal). Prepaying early dramatically reduces the interest component for the remaining tenure. Prepaying in the last few years of a loan saves relatively less because most interest has already been paid.
Is my loan data secure?
Yes. All calculations happen entirely in your web browser. Your loan amount, interest rate, prepayment amounts, and computed savings are never sent to any server. Your financial information remains completely private.