How to use this calculator
- Enter or choose outstanding loan.
- Enter or choose interest rate (per year).
- Enter or choose remaining tenure.
- Enter or choose extra payment every month.
- Enter or choose one-time prepayment (optional).
- The interest saved updates as you type. Use Copy result or Share to keep it.
Method
EMI = P × r × (1 + r)ⁿ ÷ [(1 + r)ⁿ − 1]. Each month: Interest = Balance × r; Balance = Balance + Interest − EMI − Extra (− lump sum in its month), until the balance reaches zero
- P
- outstanding principal
- r
- annual rate ÷ 12 ÷ 100
- n
- remaining months
Worked example
- EMI on ₹50 lakh at 8.5% for 240 months = ₹43,391.16; total interest = 43,391.16 × 240 − 50,00,000 = ₹54,13,879.
- Paying ₹5,000 extra each month clears the loan in 187 months (15 years 7 months).
- Interest falls to ₹40,24,629, saving ₹13,89,250.
An extra ₹5,000 a month on a ₹50 lakh, 20-year loan at 8.5% ends it 53 months early and saves about ₹13.9 lakh of interest.
What the result means
Prepaying early in the loan saves the most, because that is when the balance and interest are highest. Compare the saving with what the money could earn elsewhere after tax.
Assumptions and limits
- The interest rate stays the same for the whole loan.
- Prepayments reduce the tenure; the EMI does not change.
- Extra payments are made right after each EMI.
- Prepayment charges (generally not levied on floating-rate home loans to individuals, but possible on others) are not deducted.
- Rate resets on floating-rate loans change the result.
Questions
Is it better to reduce the EMI or the tenure?
Keeping the EMI and cutting the tenure saves more interest. Reducing the EMI eases cash flow instead.
Does prepayment affect my tax benefit?
Under the old regime, lower interest can mean a smaller home-loan interest deduction; compare the tax lost with the interest saved.
Please note: This calculator gives estimates for planning. It is not financial advice, and lenders’ actual terms, fees and rounding may differ.