How this loan prepayment works
The current balance is reconstructed after paid EMIs. Each future month applies interest to the opening balance, then the scheduled EMI, recurring extra amount and any selected lump sum reduce principal.
Worked example
An illustrative borrower with a ₹50 lakh, 20-year loan can compare the normal remaining schedule with ₹10,000 extra each month and a ₹2 lakh payment six months from now.
Try it yourself: the form above starts with these illustrative values. Change any input to see the result and chart update instantly.
Assumptions used
- Prepayments are applied after interest for the selected month.
- The contractual rate and scheduled EMI remain constant.
- Savings are measured from today, excluding interest already paid.
What this estimate does not cover
- Confirm minimum prepayment amounts, timing and fees with the lender.
- The model does not forecast future floating-rate changes.
Financial contracts can use day-count, rounding, reset and fee conventions that differ from this educational model. Use your lender’s official schedule for a contractual figure.
Frequently asked questions
What does interest saved mean?
It is future baseline interest minus future interest under the selected prepayment plan.
Can a prepayment exceed the balance?
The engine caps it at the remaining principal and never produces a negative balance.
Are prepayment charges included?
No. Check your agreement and lender; rules depend on loan and borrower circumstances.
Official references
Regulatory statements are deliberately limited and linked to primary sources. These sources were last reviewed on 3 November 2026.
- RBI: Levy of foreclosure charges / pre-payment penalty on floating-rate term loans — Banks; floating-rate term loans sanctioned to individual borrowers. Always confirm current applicability to the specific loan.
- RBI FAQ: Reset of floating interest rates on EMI-based personal loans — Communication and options around interest-rate resets; home loans fall within the RBI definition of personal loans for this framework.
- RBI consumer guidance on home loans — General borrower education on APR, fees, margin/down payment and lender comparisons. Some examples may be historical; verify lender terms.