Your two choices
A · Lower EMI
- New EMI
- —
- Months left
- —
- Interest saved
- —
B · Shorter tenure
- EMI
- —
- Months left
- —
- Interest saved
- —
How we calculate this
EMI = P × r × (1+r)^n ÷ ((1+r)^n − 1), r = rate ÷ 12 ÷ 100 A: same months, new EMI on (balance − lump sum) B: same EMI, count months until the reduced balance reaches zero Interest saved = interest before − interest after − prepayment charge
Assumes the rate stays the same. Lenders may round the EMI or adjust the last instalment.
Before you prepay
- Keep an emergency fund first. Prepaid money is hard to get back.
- Pay off more expensive debt (cards, app loans) before a cheaper home loan.
- Ask the lender in writing for your choice of A or B.
Read: Paying off a loan early
How to read your prepayment result
When you pay part of a loan early, the lender usually asks one question: do you want a lower EMI (monthly payment) or a shorter tenure (fewer months left)? This tool shows what each choice saves, so you can answer it with numbers. It also tells you whether the lender may charge you for prepaying.
What the numbers mean
The coloured box at the top depends on your loan type. Floating-rate loans (where the rate can change) taken by individuals for non-business use, sanctioned (approved) or renewed from 1 January 2026, can’t carry a prepayment charge. For that type, we hide the charge box. Fixed-rate loans can carry a charge if your KFS (Key Facts Statement, the loan’s summary sheet) or agreement shows it. For older floating-rate loans and business loans, check your papers.
Current EMI is your monthly payment today, worked out from the amount you still owe, the rate and the months left. Interest still to pay is all the interest left in the loan if you change nothing. Prepayment charge is the percentage you entered, applied to the lump sum.
Then come your two choices:
- A · Lower EMI. The months stay the same and the EMI drops.
- B · Shorter tenure. The EMI stays the same and the loan ends sooner. “Months left” shows how many fewer months you’ll pay.
“Interest saved” is the interest you avoid, minus any prepayment charge. The line under the two options gives the gap between them in rupees. It also says how much A lowers your monthly payment.
Worked example
Fictional example, using the tool’s default inputs. A home loan has ₹20,00,000 left at 9% a year, with 240 months to go. It is a floating-rate loan sanctioned in 2026, so there is no charge. The borrower prepays ₹2,00,000.
| Before | A · Lower EMI | B · Shorter tenure | |
|---|---|---|---|
| EMI | ₹17,995 | ₹16,195 | ₹17,995 |
| Months left | 240 | 240 | 186 (54 fewer) |
| Interest saved | — | ₹2,31,868 | ₹7,77,917 |
Interest still to pay before prepaying is ₹23,18,685. Option B saves ₹5,46,049 more than option A. Option A leaves ₹1,799 more in your pocket every month. If your income goes up and down, that monthly room may matter more than the bigger saving.
What this tool doesn’t do
It assumes the rate stays the same for the rest of the loan. Floating rates change, and lenders may round the EMI or adjust the last payment. So treat the results as close estimates, not the lender’s own schedule.
It doesn’t tell you whether to prepay at all. Two things usually come first: an emergency fund, and paying off costlier debt like credit cards or app loans.
The rule box is a guide, not legal advice. Your sanction letter and KFS show the terms that apply to you. The amounts you type stay on your device.
Common questions
Is there a charge for paying off a home loan early? Not on a floating-rate loan to an individual for non-business use, sanctioned or renewed from 1 January 2026. This applies whether you pay part or all of it, from any source of money. Fixed-rate loans can still have a charge if your KFS or agreement shows it.
Why does a shorter tenure save so much more? You stop paying interest on the months you cut. In the example, removing 54 months of payments is worth far more than a smaller EMI spread over all 240 months.
Will the bank pick an option for me? Some lenders choose one by default. Ask in writing for the option you want, and check your next statement.
Should I use all my savings to prepay? Usually not. Money you prepay is hard to get back. Keep at least one to three months of essential costs aside first.