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EMI & Prepayment Calculator

Find the EMI and the total interest on any loan, then test a one-time prepayment or a small monthly extra and see exactly how much interest and how many months it saves.

Prepayment (optional)
Paying even one extra EMI a year shortens a 20-year loan by several years.
Monthly EMI
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Total interest (no prepayment)
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Interest saved by prepaying
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Loan ends earlier by
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Outstanding loan, year by year

Repayment schedule (with your prepayment plan)

YearEMIInterest paidPrincipal paidPrepaidBalance at year end

How the EMI is calculated

An EMI (equated monthly instalment) stays the same every month, but its split changes over time. Early on, most of it is interest, because interest is charged on a large outstanding balance. As the balance falls, more of each EMI repays principal.

EMI = P × r × (1 + r)n ÷ [(1 + r)n − 1]
P = loan amount, r = annual rate ÷ 12, n = number of months

Example: a ₹50,00,000 home loan at 8.5% for 20 years has an EMI of ₹43,391. Over the full term you would pay ₹54,13,879 in interest, 108% of the amount borrowed. In the first year, 81% of what you pay goes to interest.

What a prepayment does

A prepayment goes straight to the principal, so every later month is charged interest on a smaller balance. Using the same loan, a one-time prepayment of ₹5,00,000 after three years:

  • If you keep the EMI and shorten the loan, it saves about ₹13,19,639 in interest and ends the loan 3 years 5 months earlier.
  • If you keep the tenure and reduce the EMI, the EMI falls to about ₹38,750 and the interest saved is about ₹4,46,858.

Shortening the tenure saves more interest because the balance falls faster. Reducing the EMI is useful when you need lower monthly outgoings. Small regular extras also add up: paying ₹5,000 more every month saves about ₹13,89,250 and finishes the loan 4 years 5 months sooner.

Prepay or invest?

Prepaying earns a guaranteed, tax-free "return" equal to your loan rate. Investing the same money in equity may earn more over long periods, but with risk. Under the old tax regime, home-loan interest on a self-occupied home is deductible up to ₹2,00,000 a year, which lowers the effective loan rate; the new regime gives no such deduction. Our prepayment vs investing article compares the two with numbers, including the tax effect.

Prepayment charges

RBI rules do not allow banks and housing finance companies to charge prepayment or foreclosure penalties on floating-rate loans taken by individuals for non-business purposes. Fixed-rate loans can carry a charge, so check your loan agreement.

Frequently asked questions

Should I reduce my EMI or my tenure after a prepayment?

Reducing the tenure saves more interest. Reducing the EMI improves monthly cash flow. If your income is stable and you can afford the current EMI, keeping it and shortening the loan is usually the better financial choice.

When is the best time to prepay?

Earlier is better, because the interest share of each EMI is highest in the first years of a loan. A prepayment in year 3 saves far more than the same prepayment in year 15.

Will the bank automatically reduce my tenure?

Many lenders reduce the tenure by default and change the EMI only on request. Ask for a revised repayment schedule after every prepayment and confirm which option was applied.

Does the calculator include processing fees or insurance?

No. It covers principal and interest only. Processing fees, loan insurance premiums and any rate changes on floating-rate loans are not included.

This calculator is for education and planning. Results depend entirely on the assumptions you enter and are not a forecast, a guarantee or investment advice. Everything runs in your browser; nothing you enter is sent to us. Read our disclaimer. Built and checked by Pradeep Rawal.