Home Loan Prepayment Calculator
Home loan prepayment allows you to pay off your entire loan or a significant portion before the scheduled tenure ends. This can result in substantial interest savings and provide financial freedom much earlier than expected.
Current Loan Details
Current EMI
Remaining Tenure
15 years
Total Amount Payable
After Part Payment
New EMI
New Tenure
0 months
New Total Payable
Benefits Summary
Interest Saved
EMI Reduction
Part Payment Amount
💡 Recommendation
Reducing EMI helps lower your monthly financial burden while maintaining the same loan tenure.
Smart Loan Prepayment Strategy
What is Home Loan Prepayment?
Home loan prepayment is the act of paying off your home loan entirely or in large chunks before the scheduled tenure ends. This can be done through lump sum payments from savings, bonuses, or other investments, resulting in significant interest savings and early loan closure.
Benefits of Home Loan Prepayment
- Massive Interest Savings: Paying off the loan early can save lakhs in interest payments over the loan tenure.
- Financial Freedom: Complete loan closure provides complete ownership and peace of mind.
- Reduced Financial Burden: No more monthly EMI obligations after full prepayment.
- Credit Score Improvement: Successful loan closure positively impacts your credit history.
- Investment Flexibility: Freed-up monthly EMI amount can be redirected to other investments.
How to Use the Prepayment Calculator
- Enter Current Loan Details: Input your outstanding loan amount, current interest rate, and remaining tenure.
- Specify Prepayment Amount: Enter the amount you plan to prepay (can be partial or full outstanding amount).
- Choose Prepayment Type: Select between full prepayment or partial prepayment options.
- View Savings: The calculator shows total interest savings, revised EMI, and new tenure details.
Full vs Partial Prepayment
Full prepayment involves paying off the entire outstanding loan amount at once, completely closing the loan. Partial prepayment involves paying a significant portion of the outstanding amount, which reduces the principal and can either lower EMI or shorten the tenure.
When to Consider Prepayment
- Windfall Gains: Inheritance, property sale proceeds, or large bonuses.
- Maturity of Investments: FDs, bonds, or other investments with lower returns than loan interest.
- Business Profits: Surplus from business or professional income.
- High Interest Rates: When your loan interest is higher than potential investment returns.
- Retirement Planning: Clearing debts before retirement for a stress-free post-retirement life.
Prepayment Strategies
- Full Prepayment Strategy: Best when you have sufficient funds and want complete financial freedom from the loan.
- Gradual Prepayment Strategy: Make substantial prepayments annually to systematically reduce the loan burden.
- Opportunistic Strategy: Prepay whenever you receive windfalls or when investment returns are lower than loan interest.
Conclusion
Home loan prepayment is a powerful financial strategy that can lead to significant interest savings and early financial freedom. Use our prepayment calculator to evaluate different scenarios and make informed decisions about your loan prepayment strategy. Always maintain adequate emergency funds before considering prepayment.