Loan Refinance Calculator

When interest rates fall or your credit score improves significantly, banks compete to acquire your loan with lower interest rate offers. A balance transfer moves your outstanding loan to a new lender at a better rate. Done right, it can save ₹3–10 lakhs on a home loan. Done wrong, it costs you processing fees for minimal benefit.

The savings calculation is straightforward: compare the total interest remaining under the old loan vs. the total interest under the new loan, then subtract the processing fee (typically 0.5–1% of outstanding principal). If the net saving is positive — and you have enough tenure remaining for the savings to materialise — transfer.

The rule of thumb: a balance transfer typically makes sense if the new rate is at least 0.5–0.75% lower and you have more than 5 years of loan remaining. For loans with less than 3–4 years remaining, the processing fee may eat most of the interest savings.

Also check: the new lender's prepayment penalty clauses (some banks lock you in for 12–18 months), whether the new loan is fixed or floating rate, and any hidden charges in the fine print.

This calculator shows you the precise breakeven point: the month at which your cumulative interest savings exceed the processing fee — so you know when the transfer pays for itself.