Home Loan Prepayment Calculator

A Home Loan prepayment calculator is an online tool that helps borrowers calculate how a partial or full prepayment of their Home Loan impacts their overall repayment structure. Prepayment reduces the principal amount, resulting in savings on the interest and shortening of the loan tenure. Using this tool, borrowers can determine how much they can save on interest payments or EMIs.

Home Loan Prepayment Calculator

Calculate how much you should prepay

Preferred loan amount

₹

₹20,00,000

₹10,00,00,000

Interest rate (per annum)

8.65%

13%

Loan tenure (months)

36 months

360 months

Estimated EMI

per month

₹ 36,690
Interest payable
₹52,41, 690

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How to Use Home Loan Prepayment Calculator?

Using a housing loan prepayment calculator is a simple process that provides instant results, helping borrowers plan better. Here is a step-by-step guide:

1. Enter Your Loan Amount (Principal)

Provide the sanctioned loan amount for your Home Loan.

2. Input the Interest Rate

Enter the annual interest rate on your loan, provided as part of your loan agreement.

3. Add Remaining Tenure

Enter the months or years remaining on your Home Loan repayment tenure.

4. Add Prepayment Amount

Include the partial or full prepayment of the Home Loan amount you intend to pay.

5. Calculate the Impact

Once all the details are entered, the tool will calculate:

- Reduction in EMI (if the tenure remains unchanged).

- Reduction in Loan Tenure (if the EMI remains constant).

- Overall Interest Savings due to prepayment.

6. Analyse Results

The calculator gives you a comparative analysis of the original repayment schedule versus the revised one (post-prepayment).

Advantages of Home Loan Prepayment Calculator

A Home Loan prepayment calculator provides significant benefits to borrowers, whether you want to reduce your EMI or your loan tenure:

1. Instant Interest Savings Calculation

Understanding how much interest you will save by making a prepayment of a Home Loan can help you make informed decisions.

2. Helps Decide Between EMI and Tenure Reduction

The calculator showcases whether reducing the tenure or EMI results in higher savings, letting you choose the most cost-effective option.

3. Simplifies Financial Planning

Visualising the savings after prepayment allows you to reallocate funds toward other financial goals.

4. Assists in Managing Prepayment Penalty Conditions

Some loans have prepayment penalties. The calculator lets you input this factor to compute the net savings accurately.

5. Encourages Early Loan Closure

Prepayment can significantly reduce your repayment tenure. The calculator helps you assess if early loan closure is feasible.

Home Loan Prepayment Calculator

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FAQs & Support

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Does prepayment reduce EMI?

Yes, prepayment reduces the EMI if you keep the loan tenure unchanged. This provides relief by reducing your monthly financial burdens. Alternatively, you can also shorten the tenure.

How do you use the Home Loan prepayment calculator?

To use the calculator, enter your loan amount, interest rate, remaining tenure and prepayment amount. The calculator then displays the revised EMI, reduced tenure and total interest saved throughout the loan.

How is a loan prepayment calculated?

Prepayment is calculated by deducting the prepayment amount from the outstanding principal. The monthly EMI and tenure are recalculated based on the new principal.

How much prepayment is allowed in a Home Loan?

You can make one prepayment per quarter for L&T Finance Home Loans.

What are the benefits of prepayment in a Home Loan?

Key benefits include reduced interest liability, shorter loan tenure, or lower EMIs. In the long term, it improves financial flexibility and supports debt-free living.

Is repaying the loan early a good idea?

Yes, repaying a loan early significantly reduces the interest expense. However, before doing so, evaluate whether the prepayment aligns with your financial goals and check for better investment opportunities.

Is there a prepayment penalty on Home Loans?

Penalties charges of up to 3% apply to fixed-rate loans.

Can a Home Loan prepayment attract a penalty?

Yes, a Home Loan prepayment can attract penalties, especially for fixed-rate loans. The penalty amount depends on the loan tenure and the outstanding principal. For instance, L&T Finance charges up to 3% for prepayments within a year of disbursement and up to 2% after a year, plus applicable taxes.