Home loan prepayment
Home Loan Prepayment Calculator.
See exactly how much interest and how many years you can save by prepaying your home loan — with no foreclosure penalty on floating-rate loans, prepayment is one of the highest-value moves you can make.
- Principal amount
- ₹50,00,000
- Total interest
- ₹50,37,280
- Total amount
- ₹1,00,37,280
| Year | Principal | Interest | Balance |
|---|---|---|---|
| 1 | ₹1,05,683 | ₹3,96,181 | ₹48,94,317 |
| 2 | ₹1,14,455 | ₹3,87,409 | ₹47,79,862 |
| 3 | ₹1,23,954 | ₹3,77,910 | ₹46,55,907 |
| 4 | ₹1,34,243 | ₹3,67,621 | ₹45,21,664 |
| 5 | ₹1,45,386 | ₹3,56,478 | ₹43,76,279 |
| 6 | ₹1,57,451 | ₹3,44,413 | ₹42,18,828 |
| 7 | ₹1,70,520 | ₹3,31,344 | ₹40,48,308 |
| 8 | ₹1,84,673 | ₹3,17,191 | ₹38,63,634 |
| 9 | ₹2,00,000 | ₹3,01,864 | ₹36,63,633 |
| 10 | ₹2,16,601 | ₹2,85,263 | ₹34,47,032 |
| 11 | ₹2,34,578 | ₹2,67,286 | ₹32,12,453 |
| 12 | ₹2,54,050 | ₹2,47,814 | ₹29,58,404 |
| 13 | ₹2,75,135 | ₹2,26,729 | ₹26,83,270 |
| 14 | ₹2,97,970 | ₹2,03,894 | ₹23,85,299 |
| 15 | ₹3,22,702 | ₹1,79,162 | ₹20,62,597 |
| 16 | ₹3,49,486 | ₹1,52,378 | ₹17,13,111 |
| 17 | ₹3,78,494 | ₹1,23,370 | ₹13,34,617 |
| 18 | ₹4,09,909 | ₹91,955 | ₹9,24,709 |
| 19 | ₹4,43,931 | ₹57,933 | ₹4,80,778 |
| 20 | ₹4,80,775 | ₹21,089 | ₹2 |
Why prepayment matters most on a home loan
Home loans run the longest of any common retail loan — 15 to 30 years — so interest compounds on the outstanding balance for far longer than on a car or personal loan. RBI also bans foreclosure charges on individual floating-rate home loans, making this the one loan type where you can prepay freely at zero cost, capturing the full benefit of every extra rupee toward your principal.
Frequently asked questions
Is prepaying my home loan actually worth it?
Almost always, yes — home loans run the longest of any retail loan (15-30 years), so even a modest recurring prepayment attacks the principal early, when interest costs are highest, and compounds into large savings over the full tenure. On a 20-year home loan, a well-timed prepayment plan can often cut total interest by 20-40%.
Are there any charges for prepaying a home loan in India?
No — for floating-rate home loans taken by individual borrowers, RBI explicitly prohibits banks and NBFCs from charging any prepayment or foreclosure penalty. This makes home loans one of the cheapest debts to prepay aggressively, unlike car loans or business loans which often still carry foreclosure charges.
Should I prepay my home loan or invest the extra money instead?
It depends on your home loan rate versus your expected investment return. If your home loan rate is 8-9% and you can reliably earn more than that post-tax elsewhere, investing may win mathematically — but prepayment is a guaranteed, risk-free return equal to your loan rate, which many people reasonably value for the certainty and peace of mind.
Should I reduce my EMI or reduce my tenure when I prepay a home loan?
Reducing tenure (keeping EMI the same) saves more total interest over the life of the loan, since it closes the loan faster. Reducing EMI (keeping tenure the same) lowers your monthly outflow immediately, which helps cash flow but saves less interest overall. Most people prepaying a home loan choose to reduce tenure, since the EMI is usually already budgeted for.
What's a good prepayment frequency for a home loan — monthly, yearly, or one-time?
Yearly prepayment (e.g., from an annual bonus) is the most common pattern and still delivers most of the benefit, since it front-loads extra principal reduction early in a long tenure. Monthly prepayment saves marginally more in total interest but requires more discipline; a single large one-time prepayment early in the loan also works well if you come into a lump sum.