Loan calculators
Home loan prepayment calculator
What does prepaying your home loan actually save?
Enter the loan as it stands today — what you still owe, the rate you are paying, and the years left. Then add whatever extra you could put in, monthly or as a single part payment, and see the interest it cancels and the time it takes off the end.
Your loan, before and after
What a bigger prepayment would do
The same loan at different monthly extras. Pick a row to load it into the calculator.
Before you prepay
Prepaying is hard to undo — the money is gone until you sell or refinance. Worth confirming these first. Nothing here is sent anywhere; the boxes are for you.
Outstanding balance over time
What you still owe, from today until the loan closes.
Year-by-year numbers
Balance at the end of each year under both plans, and the interest the prepayment has cancelled by that point.
Educational only. These are projections from the numbers you entered — not advice, a quote, or a prediction. Real returns vary, and tax treatment differs by option and changes over time. Prepayment terms, penalties and part-payment limits are set by your lender — check your loan agreement before acting on any of this. Klera never lends or moves money.
Why the first prepayment is worth several of the last
A home loan does not spread its interest evenly. Interest is charged each month on whatever you still owe, and what you still owe is at its absolute maximum right now. That is why the early years of a twenty-year loan are almost entirely interest: the EMI barely dents the principal, because most of it is rent on a very large balance.
Prepayment works by attacking that balance directly. Every rupee you put in stops being charged interest for the entire remaining life of the loan — and then the interest it would have accrued also stops, and so on. That compounding backwards is the whole mechanism, and it is why timing dominates everything else. Move the extra-monthly slider above and watch what happens: a modest amount added early does not shave a proportional slice off the interest, it shaves a disproportionate one.
The practical version of this point is uncomfortable. The prepayment you make in year two of a loan and the identical prepayment you make in year fifteen are not the same decision. The second one is mostly returning principal you were about to repay anyway. If you are going to prepay at all, the arithmetic strongly favours doing it sooner and smaller rather than later and larger — which is exactly the opposite of how most people accumulate the spare cash to do it.
Reduce the tenure, not the EMI
When you make a part payment, the lender has to rebuild the schedule around a smaller balance, and there are two ways to do that. Keep the EMI where it is and the loan ends earlier. Keep the end date where it is and the EMI falls. Most lenders shorten the tenure unless you ask otherwise, and that default is the right one for almost everybody.
The gap between the two is not marginal. Shortening the tenure means the full old payment keeps hammering a balance that just got smaller, so the loan closes years earlier and the interest that would have accrued in those years never happens. Reducing the EMI stretches the same smaller balance over the original horizon, which means you carry it for just as long and hand a large share of the saving straight back to the lender.
The calculator above models the tenure-reduction case, because that is both the default and the version worth doing. If your cash flow is genuinely tight and the lower EMI is what makes the loan survivable, take it — that is a liquidity decision, not a mistake. Just be clear that you are buying breathing room, and that the price is most of the interest saving you came for.
When prepaying is the wrong move
Prepayment has one serious flaw as a use of money: it is close to irreversible. Cash that goes into a house is gone until you sell or borrow against it. A savings balance can be spent on a hospital bill; a reduced loan balance cannot. So the order of operations matters more than the arithmetic. Build an emergency fund that covers several months of expenses first, and only then start pushing money into the loan.
Clear costlier debt first, too. A home loan is usually the cheapest borrowing an Indian household will ever have. A credit card revolving at around forty percent a year, or a personal loan in the mid-teens, is destroying far more value per rupee than an 8.5% home loan is. Prepaying the cheap loan while the expensive one runs is a common and expensive inversion.
And be honest about what else the money could do. Prepayment earns exactly your loan rate — no more, no less. If you are twenty-eight with a thirty-year horizon and a reasonable tolerance for volatility, an equity SIP has historically beaten 8.5% over long stretches, and the flexibility is worth something on its own. If you are fifty-five and want the loan gone before you retire, the guaranteed 8.5% and the psychological relief of a clean balance sheet are a perfectly good answer. Both can be right.
Penalties, limits and the fine print
Before transferring anything, read the prepayment clause of your loan agreement. As a general rule, floating-rate home loans to individual borrowers cannot carry a foreclosure or prepayment penalty, while fixed-rate loans often can — and loans in a company's name follow different rules again. Some lenders also set a minimum part-payment amount, cap how many part payments you may make in a year, or require the request in writing rather than a silent transfer to the loan account.
Two operational details catch people out. First, get written confirmation of how the schedule was rebuilt — whether the tenure shortened or the EMI fell — because assuming the wrong one for a year is an expensive assumption. Second, if the loan is close to a balance transfer decision, run both. A rate cut applies to the whole remaining balance, which sometimes beats a one-off part payment outright.
What this model deliberately leaves out
The calculator holds your rate flat for the entire remaining tenure. Real floating-rate loans move with the benchmark, and lenders usually absorb a rate change by adjusting the tenure rather than the EMI — which means your real payoff date drifts in ways no model can predict. Treat the output as the shape of the answer, not a schedule you can hold anyone to.
It also ignores tax entirely. Home loan interest and principal attract deductions under the Indian income tax rules, and where those apply they lower your effective borrowing cost, which lowers the real return that prepayment earns you. The rules change, they differ between tax regimes, and they depend on your own situation — so check the current position, or ask someone who does this for a living, before treating the headline loan rate as your true cost. If deductions apply to you, the case for prepaying is weaker than the numbers above suggest.
Finally, the model assumes the extra payment actually happens, every month, for years. That is a strong assumption. A one-off part payment you have already saved is far more certain than a monthly commitment you intend to keep, which is worth remembering when the two produce similar-looking numbers on screen.
Doing this with your actual loan
These are round numbers on a flat rate. Your loan has a real balance, a rate that has moved since you took it, and part payments you may already have made. Klera's loan manager keeps the real amortisation schedule for each loan, handles rate changes mid-loan, and shows payoff progress against the original plan — alongside a loan comparison view and a tenure planner for the decisions around it.
All of it, including these calculators, runs offline on your phone: no account, no cloud sync, nothing about your balances leaving the device. If you would rather not type your outstanding loan into a website at all, that is the point — get Klera free on Android and run the same numbers where they stay yours.
Frequently asked questions
Is it better to reduce EMI or tenure when prepaying?
Reducing the tenure saves far more, and it is what most lenders do by default. Keeping the EMI the same means every rupee of the old payment keeps attacking a smaller balance, so the loan collapses years earlier. Cutting the EMI instead gives you monthly breathing room but stretches the remaining balance over the same end date, which hands most of the interest saving back. Ask the lender explicitly — the choice is usually yours.
How much can I save by prepaying my home loan?
It depends almost entirely on timing. On a 20-year loan, an extra amount paid in year two can cancel several times the interest that the same amount cancels in year fifteen, because early balances are large and interest is charged on the balance. Put your real outstanding figure, rate and years remaining into the calculator above and it will show the exact number for your loan.
Is there a penalty for prepaying a home loan in India?
It depends on the type of loan. Floating-rate home loans to individual borrowers generally cannot carry a foreclosure or prepayment penalty, while fixed-rate loans often can, and loans to non-individuals follow different rules again. Some lenders also cap how much you may part-pay in a year without charges. Your loan agreement is the authority here, so read the prepayment clause before you transfer anything.
When should I not prepay my home loan?
When you have no emergency fund, when costlier debt is outstanding, or when the money is money you may need back. A credit card at 40% or a personal loan at 16% should be cleared long before a home loan at 8.5%. And prepayment is close to irreversible: the money goes into the house, not into an account you can draw on, so paying down a loan while your buffer is empty can force you into expensive borrowing later.
Is it better to prepay or invest?
Prepaying earns exactly your loan rate, guaranteed, with no market risk. An investment has to beat that rate after tax and after a decade of volatility to be the better choice. At 8.5% the bar is one that equities have historically cleared and most fixed-income products have not. The honest answer is that it is a risk question, not an arithmetic one — the comparison is laid out in detail in our prepay-versus-SIP-versus-gold analysis.
Does prepaying improve my credit score?
Not dramatically, and not immediately. Paying the EMI on time month after month is what builds the record; a lump-sum part payment mostly just reduces a balance you were already servicing well. Closing a long-running home loan can even shorten your visible credit history slightly. Prepay for the interest saving, which is large and certain, not for a score effect that is small and indirect.