About this tool
The Loan Prepayment Calculator shows how much interest you save by making a one-time prepayment toward your existing loan. You can choose to either reduce the tenure (keeping EMI same - bigger savings) or reduce the EMI (keeping tenure same).
Timing inside the amortization schedule matters more than most borrowers realise. A prepayment in year 2 of a 20-year loan removes interest from 18 future years; the same rupee paid in year 16 only cancels 4 years. That is why a one-time bonus of Rs 5,00,000 in year 2 of a Rs 30,00,000 floating-rate home loan at 8.6 percent typically saves about Rs 13-14 lakh in interest, while waiting until year 12 saves only Rs 4-5 lakh. The RBI 2014 circular bans foreclosure charges on individual floating-rate term loans, so for home, personal, and auto loans on floating rates you can prepay freely without penalty.
Common pitfalls
- Breaking the emergency fund: always keep 6 months of expenses liquid before sending lump sums to the lender; a prepaid loan cannot give the cash back if you lose your job.
- Forgetting Section 24(b) tax shield: if you claim Rs 2 lakh annual interest deduction in the 30 percent slab, your effective home loan rate is closer to 6 percent, which weakens the case to prepay versus invest.
How it works
- Enter outstanding loan amount and current details.
- Enter prepayment amount.
- Pick: Reduce Tenure (save more interest) or Reduce EMI (better cashflow).
How to use the Loan Prepayment Calculator
The Loan Prepayment Calculator is a browser-based tool that runs entirely on your device. Inputs you enter never reach a server - all calculations happen client-side in JavaScript. This means:
- Privacy: nothing is logged, sent, or stored by 3Tej. Inputs disappear when you close the tab.
- Speed: results update as you type. No network round trip.
- Offline use: once the page is cached, it works without internet.
- No signup: no account, no email, no rate limits.
Step by step
- Enter your inputs in the form above. Each field is labeled with its unit (currency, percent, kg, etc.) and the expected range.
- Read the result as it updates. The number reflects the formula commonly accepted in Loan Prepayment-related calculations.
- Adjust to see sensitivity: change one input at a time and watch how the output moves. This is the fastest way to understand which variable matters most.
- Copy or screenshot the result for later reference. The page state persists for the session if your browser allows it.
When you would use this
- Quick estimates: when you need a number now and don't want to open a spreadsheet.
- Sensitivity analysis: testing how a result changes as inputs vary, before committing to a real-world decision.
- Comparison: running the same calculation with different inputs to compare options side by side.
- Learning: building intuition for how the underlying math behaves.
- Documentation: capturing a snapshot of inputs and outputs at a point in time.
Frequently asked questions
Reduce EMI or tenure - which is better?
Reduce tenure - it saves much more interest. Reduce EMI only if you need monthly cashflow relief immediately. On a ₹30L loan, prepaying ₹5L: tenure-reduce saves ~₹13L; EMI-reduce saves ~₹4L.
Are there any prepayment charges?
Floating-rate home/personal loans: usually no charges (RBI rule). Fixed-rate loans: 2-5% penalty common. Always check your loan agreement.
Should I prepay home loan or invest?
If your home loan rate (8.5%) > expected investment return after tax, prepay. If you're in 30% slab and have access to equity (12% historical), investing wins. Often a hybrid is best.
When in the loan timeline does prepayment save the most?
Early. In years 1-5 of a 20-year EMI, roughly 70% of every EMI is interest, so cancelling principal then erases the most future interest. The same Rs 5L prepaid in year 2 saves about 3x what it saves in year 12.
Does prepayment affect my CIBIL score?
Foreclosing a loan early closes the credit line, which removes ongoing positive payment history. Most borrowers see a 10-30 point dip for 2-6 months that recovers as other accounts age. Net long-term impact is neutral or slightly positive due to lower utilization.
Is the Loan Prepayment Calculator accurate?
The Loan Prepayment Calculator applies the standard formula for loan prepayment. Accuracy is limited only by your input precision. For decisions with material consequences, use the result as a starting point and verify with a qualified professional or the relevant official source.
Is the Loan Prepayment Calculator free?
Yes. 100% free, no signup, no payment, no API key. The site is funded by display ads that appear around the tool but not inside the calculation flow.
Are my inputs saved?
No. Inputs stay in your browser tab. Closing the tab discards them. The site uses Google Analytics for traffic measurement (anonymized) but does not see what you type into the form.
Can I use the Loan Prepayment Calculator on my phone?
Yes. The tool is responsive and tested on iOS Safari, Android Chrome, and major desktop browsers. Touch targets meet Apple's 44pt and Google's 48dp minimum guidance.
How do I report a bug or suggest improvement to the Loan Prepayment Calculator?
Email hi@3tej.com with the URL of this page and a description of what you saw vs expected. We typically respond within 72 hours and update calculators when rules or formulas change.
How accurate is the Loan Prepayment Calculator?
It applies the standard formula. Accuracy is limited only by your input precision. For decisions with material consequences (taxes, medical, legal, structural), use the result as a starting point and verify with a qualified professional in the relevant field.
Is the Loan Prepayment Calculator free to use?
Yes. 100% free, no signup, no payment, no API key. The site is funded by display ads around the tool but not inside the calculation flow.
Are my inputs saved anywhere?
No. All inputs stay in your browser tab. Closing the tab discards them. The site uses Google Analytics for traffic measurement (anonymized) but the analytics never see what you type into the form.
Does the Loan Prepayment Calculator work offline?
Yes. Once the page has loaded, it works without internet. The calculation runs in JavaScript on your device.
Can I share results from the Loan Prepayment Calculator?
Take a screenshot or copy the output. The page doesn't generate shareable URLs for specific calculations - inputs stay in your browser only.
Why are the results different from another loan prepayment tool?
Most likely: different formula assumptions, different default values, different rounding rules, or different applicable rates. Check the methodology if both tools document it. Both can be valid for different scenarios.