1. Your Current Loan

2. Your Prepayment Plan

You Will Save

₹10,91,420

in total interest + 2 Yrs, 8 Mos in tenure

Original Interest₹38,62,656
New Interest After Prepayment₹27,71,237
Interest Saved₹10,91,420
Standard EMI CalculatorPrepay vs Invest (SIP)

How Prepayment Works

EMI Prepayment (Part-Payment) is one of the smartest financial moves you can make. By paying extra money towards your loan (either as a lumpsum or by increasing your monthly EMI), you reduce the principal faster. Since interest is calculated on the reducing balance, this saves you massive amounts of interest and shortens your loan tenure dramatically.

Best Prepayment Strategies

Two highly effective prepayment strategies:

  • Annual Lumpsum Strategy: Use your yearly bonus, incentive, or any windfall to make a big one-time payment.
  • EMI Step-Up Strategy: As your salary grows, voluntarily increase your EMI by 5–10% every year.
  • Best Approach: Combine both — lumpsum + extra monthly EMI — to maximize savings.
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The Golden Rule: Prepay Early

The earlier you prepay, the more you save. In the first 5–7 years of a 20-year loan, most of your EMI goes towards interest.

Frequently Asked Questions

Always choose to reduce tenure (keep EMI same). This maximizes interest savings. Reducing EMI gives you immediate cash flow relief but costs you much more interest in the long run.

Fincado Research Team

Fact Checked

Written and verified by ex-bankers, Chartered Accountants & RBI experts with 12+ years of experience. Every rate and fee is cross-checked against real borrower approvals and official lender disclosures.

Disclaimer: Fincado provides financial calculators and educational content for informational purposes only. We are not SEBI registered investment advisors. Always consult a certified financial planner before making any loan or investment decision.

Last Reviewed: Apr 2026
Methodology: Data-Driven
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