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About this tool
Compare your loan with and without prepayments. See how extra payments reduce your tenure and total interest paid.
The Loan Prepayment Calculator shows what happens to your loan when you pay a fixed extra amount towards principal every month: it computes the scheduled EMI from the standard formula P x r x (1+r)^n / ((1+r)^n - 1), then runs the loan month by month with the extra payment applied straight to principal, and reports the shortened tenure alongside the interest saved. Enter loan amount, annual rate, tenure in years and the extra monthly amount, and you get the original EMI, the reduced tenure in years and months, and the total saving. It is for borrowers deciding whether a small monthly top-up is worth committing to.
Open Loan Prepayment Calculator on AltFTool — it loads instantly in your browser.
Enter Loan Amount, Interest Rate (% p.a.), Loan Tenure (Years) and Monthly Prepayment — the form opens on ₹50,00,000 at 9% over 20 years with ₹5,000 extra a month.
Press Calculate; the tool derives the scheduled EMI from P × r × (1+r)^n / ((1+r)^n − 1), then walks the balance one month at a time with the extra amount applied straight to principal.
Total Payment (with Prepayment) appears with Interest Saved beneath it, and the tiles below give Monthly EMI, Original Tenure and Reduced Tenure expressed in years and months.
It amortises the balance one month at a time with the extra payment applied to principal, rather than approximating with a closed-form shortcut.
The reduced tenure comes back in years and months next to the original tenure, so you can see exactly when the loan ends.
Keeping the EMI fixed and varying only the extra monthly amount makes the marginal value of each additional rupee obvious.
On the tool's default scenario — a 50,00,000 loan at 9% over 20 years — an extra 5,000 a month cuts the tenure from 240 months to about 186 months, roughly 15 years 6 months, and saves close to 15,00,000 in total outgo. The EMI itself stays at about 44,986.
This calculator models tenure reduction, which is what most lenders apply by default: the EMI stays the same and the loan closes earlier. Some lenders let you choose EMI reduction instead, which keeps the original end date and lowers the monthly instalment, saving less interest overall.
Prepaying gives a guaranteed return equal to your loan interest rate, so it usually wins on high-rate debt above roughly 8-9%; below that, a diversified investment may beat it if you can tolerate the risk. This is informational only — check your loan's prepayment terms and speak to a licensed adviser about your own position.
Because in an amortising loan the early instalments are mostly interest, so a rupee of principal removed in year 2 stops interest accruing for the remaining 18 years, while the same rupee in year 18 only saves two years of interest. Front-loading prepayments is where nearly all the benefit sits.
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