Home Loan Prepayment Calculator
See how much interest a one-time or regular prepayment saves you over the life of the loan.
Assumes one prepayment at the end of each year, applied to reduce tenure. Floating-rate home loans have no prepayment penalty in India.
About the Home Loan Prepayment Calculator
Prepaying a home loan is one of the highest-return uses of spare cash for any salaried Indian. The catch: the savings are not obvious because they are spread across the remaining tenure. The AlarmDaddy Home Loan Prepayment Calculator makes them visible. Enter your current outstanding principal, your interest rate, the remaining tenure, and a one-time or recurring prepayment amount — the calculator shows you the new tenure (or the new EMI, if you choose to keep tenure constant), the total interest saved, and the break-even point.
A typical example: on a ₹50 lakh home loan at 8.5% with 18 years remaining, prepaying just one extra EMI per year (about ₹40,000) shaves nearly four years off the tenure and saves over ₹10 lakh in interest. The calculator lets you try different scenarios — bonus money, year-end prepayments, or simply increasing the EMI by 5% every year — and see which gives the biggest dent.
How to use this calculator
- 1Enter the current outstanding loan principal.
- 2Enter the interest rate and remaining tenure.
- 3Enter the prepayment amount (one-time or yearly).
- 4Choose whether to reduce tenure or reduce EMI.
- 5Read the interest saved and the new tenure or EMI.
The formula
When you prepay, the principal drops immediately. Future months' interest is calculated on the new (smaller) principal, so each future EMI now pays off more principal. Either the tenure shortens (most banks' default) or the EMI reduces while tenure stays constant.