Loan Prepayment Calculator
Calculate how much interest you save and how many months you eliminate by making lump-sum or extra monthly principal repayments.
About Loan Prepayment
Prepaying your loan reduces the outstanding principal balance directly. Because interest is charged on the unpaid principal, extra payments accelerate loan payoff and eliminate thousands in lifetime interest charges.
How Extra Principal Works
Standard amortization splits monthly payments between interest and principal. Adding extra cash directly slashes principal debt, reducing the compounding base for subsequent billing cycles.
Worked Example
On a $200,000 balance at 7.5% with 180 months remaining:
- Original monthly EMI: ~$1,854.00
- Adding $300/month reduces total payoff time by approximately 45 months.
- Cumulative interest saved exceeds $32,000 over the remaining tenure.
Frequently Asked Questions
Does my extra payment go directly toward the principal?
Yes, provided you designate the additional funds as an "extra principal payment" with your loan servicer.
Are there prepayment penalties?
Most personal and residential mortgages do not carry prepayment penalties, but you should verify your loan agreement terms beforehand.
Is it better to prepay early or later in the loan?
Early prepayments deliver the largest interest savings because interest charges are highest during the beginning of the amortization schedule.
Does prepaying lower my required monthly EMI?
By default, lenders shorten your tenure while keeping the required monthly payment constant. Requesting loan recast is required if you want lower scheduled payments.
Calculate in three steps
- 1Enter your valuesUse the fields above and check the units shown beside each input.
- 2Run the calculationSelect Calculate to refresh the result with your latest values.
- 3Review or shareCompare the result, reset the form, print it, or share this page.