Home Loan Prepayment Calculator
See how paying just a little extra every month can reduce your tenure by years and save lakhs in interest.
Loan Balance Projection (Principal Outstanding)
Frequently Asked Questions
How does prepaying a home loan reduce total interest?
Every prepayment goes directly toward reducing the outstanding principal balance. Because your interest is calculated as a percentage of this outstanding amount, reducing the principal results in lower interest accrual and speeds up the loan payoff timeline.
Are there prepayment charges for home loans in India?
Under RBI regulations, lenders are prohibited from charging foreclosure or prepayment penalties on floating-rate home loans issued to individual borrowers. Fixed-rate home loans or loans borrowed by corporate entities may still incur charges depending on the bank.
Related Articles
Should You Prepay Your Home Loan? Here's the Honest Answer
There's a debate that splits every finance forum in India: Is it smarter to prepay your home loan, or invest the surplus in mutual funds? The honest answer is: it depends on numbers and psychology, in roughly equal measure.
On pure math: if your home loan rate is 8.5% and you believe equities will compound at 12%+ over 10+ years, investing wins. But the comparison is after-tax. Home loan interest up to ₹2 lakh/year is deductible under Section 24. So the effective cost of an 8.5% home loan is closer to 5.9% for someone in the 30% bracket. Against that, equity at 12% pre-tax (10.4% post LTCG tax) clearly wins.
But psychology matters. The psychological weight of a ₹60 lakh loan producing anxiety, affecting sleep, and causing decisions — that has a real cost too. If being debt-free in 10 years instead of 20 gives you clarity and confidence, the intangible value may be worth a 1-2% return differential.
The middle path: keep your EMI intact, but make one extra EMI payment per year as a principal prepayment. This alone can cut your 20-year loan to 16–17 years with no significant lifestyle impact. This calculator shows you exactly how much each prepayment saves.
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