No prepayment
- Scheduled EMI
- ₹12,399
- Estimated payoff time
- 10 years
- Total estimated interest
- ₹4,87,828
- Estimated interest saved
- ₹0
- Total payments, including lump sum
- ₹14,87,828
Loans
Loan Prepayment Calculator
Compare how a lump sum and extra monthly payments may change loan interest and payoff time.
Your loan details
Change an assumption to compare the estimates. The calculation stays in your browser.
Assumption: the lump sum is applied now, before the next month’s interest. The extra monthly amount is paid after each EMI, starting in month one.
Compare repayment approaches
All three estimates use the same loan amount, rate and term. The two prepayment approaches use the lump sum and extra monthly payment you entered.
Keep EMI, shorten the term
- Scheduled EMI
- ₹12,399
- Estimated payoff time
- 5 years 5 months
- Total estimated interest
- ₹2,24,903
- Estimated interest saved
- ₹2,62,925
- Total payments, including lump sum
- ₹12,24,903
Reduce the scheduled EMI
- Scheduled EMI
- ₹11,159
- Estimated payoff time
- 6 years
- Total estimated interest
- ₹2,48,639
- Estimated interest saved
- ₹2,39,190
- Total payments, including lump sum
- ₹12,48,639
Estimated year-end balances
Balances are shown after each year’s payments; a repaid loan stays at zero.
| Year | No prepayment | Keep EMI, shorten term | Reduce scheduled EMI |
|---|---|---|---|
| Year 1 | ₹9,33,673 | ₹7,62,440 | ₹7,77,912 |
| Year 2 | ₹8,61,483 | ₹6,12,721 | ₹6,45,032 |
| Year 3 | ₹7,82,912 | ₹4,49,768 | ₹5,00,407 |
| Year 4 | ₹6,97,396 | ₹2,72,412 | ₹3,42,999 |
| Year 5 | ₹6,04,321 | ₹79,379 | ₹1,71,677 |
| Year 6 | ₹5,03,019 | ₹0 | ₹0 |
| Year 7 | ₹3,92,763 | ₹0 | ₹0 |
| Year 8 | ₹2,72,762 | ₹0 | ₹0 |
| Year 9 | ₹1,42,153 | ₹0 | ₹0 |
| Year 10 | ₹0 | ₹0 | ₹0 |
ChangelogHow we test this calculatorEmbed this calculator
How this calculator works
At the defaults, the same prepayments save about ₹2.63 lakh in estimated interest when the EMI stays unchanged.
- Step 1Start with the balance₹10 lakhthe loan amount before prepayment
- Step 2Apply the lump sum₹1,00,000deducted before the first month’s interest
- Step 3Compare two plans₹5,000added after each EMI from month one
The estimate uses a fixed nominal annual rate divided into equal monthly rates. Interest is calculated on the balance before each month-end payment. A final payment is adjusted to clear any remaining amount.
What the result leaves out
- Fees and taxesPrepayment charges, taxes, insurance and other lender fees are excluded.
- Rate changesThe same rate is used for every month; floating-rate resets are not predicted.
- Lender timingPayment dates, processing delays, restrictions and lender-specific rounding are not modelled.
Worked example
- Monthly rate
i = annual rate ÷ (12 × 100)- Scheduled EMI
EMI = P × i ÷ (1 − (1 + i)^−n)- Interest saved
baseline interest − prepayment-plan interest
- Pstarting loan balance ₹10,00,000
- imonthly rate 0.71%
- noriginal payment count 120
- Baseline monthly EMIordinary-annuity payment₹12,399
- Lump sum applied nowdeducted from the starting balance₹1,00,000
- First year principal, including lump sumlump sum + monthly principal repaid₹2,37,560
- First year interestsum of monthly interest₹71,223
- Estimated interest savedbaseline interest − tenure-plan interest₹2,62,925
The example applies the lump sum before the first month’s interest and the extra payment after each EMI. Figures are rounded for display; the calculation keeps full precision.
Reading your result
- Keep the EMI5 years 5 monthsEstimated payoff time; about ₹2.63 lakh less interest than the baseline.
- Reduce the scheduled EMI₹11,159New estimated EMI over the original term; payoff takes 6 years with the extra monthly payment.
- Baseline estimate
- Interest after prepayment
The “reduce EMI” result recalculates the scheduled payment after the lump sum. Your extra monthly payment remains separate, so the loan can still finish before the original term.
To see the month-by-month split behind these totals, open the amortization calculator. The EMI calculator works out the starting EMI, and the loan tenure calculator shows how long a chosen payment takes to clear a balance.
Before you prepay
- ChargesAsk whether any prepayment fee applies to your loan.
- TimingFind out when a part-payment is credited to the balance.
- Your choiceConfirm whether you can pick a lower EMI or a shorter term.
- Rate resetsA floating rate can change the savings shown here.
The calculator assumes the money reaches the balance at once, with no fee and a fixed rate. If another lender offers a lower rate instead, compare that route with the loan balance transfer calculator.
Common mistakes
Mistake: Treating the estimate as your lender’s final schedule.
Instead: Check the payment date, fees and prepayment terms in your loan documents.
Mistake: Entering the monthly extra amount as the total EMI.
Instead: Enter only the extra amount paid on top of the scheduled EMI.
Mistake: Assuming a floating rate will stay unchanged.
Instead: Recalculate if your lender changes the rate or repayment terms.
This calculator does not assess affordability or recommend a repayment choice. Use your lender’s written schedule for exact obligations and consult a qualified professional about your circumstances.
Checking the method
A separate script recomputes every test case two ways, by closed-form balances and month by month, in 60-digit arithmetic.
Read how we test our calculators, or browse more money calculators.
Frequently asked questions
How does a loan prepayment change the estimate?
A prepayment reduces the balance on which later interest is estimated. This calculator compares keeping the EMI and shortening the term with recalculating the EMI over the original term.
When is the lump-sum payment applied?
The estimate applies it immediately, before interest for the first month is calculated. A lender may apply a payment on a different date.
How are monthly extra payments handled?
The extra amount is added after each scheduled EMI from month one. It is capped at the remaining amount due.
What does reducing the term mean?
The scheduled EMI stays at its original estimate. The lump sum and extra monthly payments may clear the balance in fewer months.
What does reducing the EMI mean?
After the lump sum, the scheduled EMI is recalculated over the original loan term. Extra monthly payments are still added and can shorten the actual payoff time.
Does this estimate include prepayment fees?
No. Fees, taxes, insurance, lender restrictions and processing delays are not modelled. Check your loan agreement for applicable terms.
Does it model a floating interest rate?
No. It uses the same nominal annual rate for every month. A rate reset can change the EMI, interest and payoff time.
Is the result a lender quote?
No. It is an illustration using the assumptions shown. A lender’s payment dates, rounding and loan terms may produce different figures.
Sources and methodology
The formulas are standard time-value-of-money results. We check every figure against golden values worked out independently, by closed form and by month-by-month simulation; see the methodology.
- Principles of Finance 2e, section 8.5: Equal Payments with a Financial Calculator and Excel, OpenStax, Rice University (accessed 22 Oct 2026)
Written and maintained by Nitin Raturi, a software engineer (about the author). Last reviewed 22 Oct 2026; next review due by . Found an error? Tell us.
Changelog
- : Registered at the owner's request; demand metrics remain unverified. Compares immediate lump-sum and monthly prepayments. The default tenure estimate saves about ₹2.63 lakh in interest.