Loan Prepayment Savings Calculator

A lump-sum prepayment at month 24 on a 20-year loan typically saves 25-50% of remaining interest — interest saved is highest early in the tenure and lower in later years. Calculator applies the reducing-balance formula to your exact month and amount.

Reducing tenure always saves more interest (typically 1.5x the saving from reducing EMI). Reduce EMI only if cash flow benefit outweighs the lost interest savings or if you want to use the freed EMI capacity for higher-expected-return investments.

No capital-gains or TDS arises on prepayment. For a home loan, when outstanding principal changes, Section 80C principal and Section 24(b) interest deductions are computed on the actual outflow — prepayment reduces future-year deductions but you still benefit cumulatively.

Yes on some categories — fixed-rate retail loans and NBFC personal loans typically charge 2-4%. Floating-rate home loans are free. The calculator subtracts prepayment penalty from the saving — the prepayment is worthwhile only if interest saved > penalty paid.

Part-prepayment pays a lump-sum on the outstanding principal without ending the loan. Full foreclosure closes the loan entirely. Both reduce future interest; part-payment keeps the loan running with smaller EMI or shorter tenure.

Foreclosure has no negative impact on CIBIL score (RBI banned reporting closure-status issues). Part-payment improves score because outstanding balance reduces. Loan accounts with closed and well-managed history are positive signals for future loan eligibility.