Loan Prepayment Calculator - See How Much You Save

Compare your home loan rate (post-tax) with expected investment returns. Home loan at 8.5% saves 8.5% guaranteed (tax-adjusted to ~6% if in 30% slab with Section 24b deduction). Equity SIP may give 12-14% CAGR over 10+ years but with risk. If your loan rate is above 9%, prepaying is safer. If below 8.5% and you have 10+ year horizon, equity SIP may win. For a ₹50 lakh loan, prepaying ₹5 lakh in year 2 saves approximately ₹10 lakh in interest. Use the free Loan Prepayment Calculator on AbacusHand to calculate your exact result instantly.

As per RBI circular, banks and NBFCs cannot charge prepayment penalty on floating-rate home loans taken by individual borrowers. Fixed-rate home loans may attract a foreclosure charge of 2-5% of the outstanding principal. Always check your loan agreement. If your bank charges penalty on a floating-rate loan, you can file a complaint with the RBI ombudsman. For example, prepaying ₹10 lakh on a fixed-rate loan may cost ₹20,000-₹50,000 in penalty. Use the free Loan Prepayment Calculator on AbacusHand to calculate your exact result instantly.

The interest saving depends on when you prepay and the loan amount. On a ₹30 lakh home loan at 8.5% for 20 years, prepaying ₹5 lakh in year 2 saves approximately ₹8-10 lakh in total interest and reduces tenure by 4-5 years. Prepaying in year 10 (same amount) saves only ₹3-4 lakh. The earlier you prepay, the more you save — interest front-loading makes early prepayments far more valuable. Use the free Loan Prepayment Calculator on AbacusHand to calculate your exact result instantly.

Part prepayment (partial prepayment) means paying a lump sum over and above your regular EMI, reducing the outstanding principal. This can reduce either tenure or EMI. Full prepayment (foreclosure) means paying off the entire outstanding loan at once. Part prepayment is more common and flexible — you can prepay ₹50,000 from a bonus without closing the loan entirely. Full prepayment may attract foreclosure charges on fixed-rate loans. Use the free Loan Prepayment Calculator on AbacusHand to calculate your exact result instantly.

The best time to prepay is in the first 5-7 years when the interest component in EMI is highest. In the early years of a ₹40 lakh, 8.5%, 20-year loan, over 85% of each EMI goes towards interest. A ₹5 lakh prepayment in year 2 saves ~₹10 lakh in interest; the same prepayment in year 15 saves only ~₹2 lakh. Use annual bonuses, Diwali bonus, or inheritance for prepayment in the loan first 3-5 years. Use the free Loan Prepayment Calculator on AbacusHand to calculate your exact result instantly.