Loan Prepayment
Estimate interest savings from an extra payment.
About this tool
This tool gives a simplified illustration of how an extra payment could affect loan interest. Its current method subtracts the extra amount from the outstanding principal and recalculates a loan over the remaining tenure; it is not a lender-grade amortisation schedule for a mid-term prepayment.
How to use this calculator
- Enter the outstanding principal, annual rate and remaining term.
- Enter the additional amount you are considering paying.
- Calculate the approximate difference between the simplified interest estimates. Check lender prepayment rules and charges separately.
Formula
Worked example
If ₹5,00,000 remains outstanding and you consider an extra ₹50,000 payment, this tool compares estimates for ₹5,00,000 and ₹4,50,000 over the entered remaining term. Actual savings depend on how the lender applies the payment.
Frequently asked questions
Does this calculate the exact interest saved by my bank?
No. It is a simplified illustration, not a month-by-month amortisation of the actual account. Ask the lender for an updated schedule after prepayment.
Will prepayment always reduce my EMI?
Not necessarily. Depending on lender policy and your instruction, a prepayment may reduce the tenure, reduce the EMI, or be applied in another permitted way.
Are prepayment fees included?
No. Check your loan agreement for charges, restrictions and any tax or contractual implications.
What information should I request from the lender?
Ask for the outstanding principal, prepayment treatment, revised EMI/tenure, charges and revised amortisation schedule.
SolveKit provides general calculations for information and planning. Results depend on the values and assumptions entered. For financial, investment, payroll or tax decisions, confirm the applicable product terms and current rules with an authoritative source or qualified professional.