Loan Prepayment Strategy Analyzer
Compare how much interest you save by reducing tenure versus how much cash flow you gain by reducing EMI.
Problem
Extra loan payments can either buy flexibility or buy speed.
Promise
Compare reducing loan tenure versus reducing EMI when you make extra prepayments.
Trust note
No login. Loan math runs client-side and shows year-by-year balance impact.
Tool mode
Basic keeps the fast default flow. Advanced unlocks goal seek, sensitivity sweep, and a second comparison scenario.
Current loan
Prepayment plan
Main answer
1.7 years
Reduce tenure if your EMI is manageable. It saves about ₹4,85,626 in interest and closes the loan 1.7 years earlier.
Base EMI is ₹34,981. Reducing tenure saves more interest, while reducing EMI gives quicker breathing room.
Current EMI
₹34,981
Based on ₹35,00,000 outstanding over 180 months.
Tenure saved
1.7 years
Reduce-tenure strategy saves ₹4,85,626 in interest.
EMI drop
₹2,004
Reduce-EMI strategy still saves ₹1,58,772 in interest.
Total extra prepay
₹2.0L
Applied on a once schedule.
Outstanding balance by year
Reduce tenure
₹4,85,626
1.7 years faster payoff with the same EMI.
Reduce EMI
₹32,976
Recast EMI after prepayment while keeping the original end date.
Baseline interest
₹27,96,526
Use this as the benchmark cost if you make no extra payments.
How to read this tool
Most banks let you choose whether prepayment lowers EMI or shortens tenure. The right answer depends on whether you need cash-flow relief or want to kill interest faster.
Use this as a strategy planner before you confirm how your lender actually applies part-prepayments.
Cautions
- Check whether your lender charges part-prepayment fees or requires you to submit a recast request.
Why the result leans this way
Interest math favors speed
Keeping EMI constant attacks principal faster, so the reduce-tenure option usually wins on total interest saved.
Cash flow still matters
If your emergency fund is thin or you expect income volatility, an EMI reset can be rational even when it saves less interest.
Assumptions and sources
Loan schedule assumption
Prepayments are modeled at the end of the selected month frequency using monthly reducing-balance interest.
Effective from 2026-04-01
Banking note
Processing fees, floating-rate resets, and lender-specific rounding are not included in the MVP model.
Effective from 2026-04-01
Frequently asked questions
Should I reduce EMI or reduce tenure after prepayment?
Reducing tenure usually saves more interest, while reducing EMI helps if your main goal is immediate monthly breathing room.
Does the calculator support recurring prepayments?
Yes. You can compare one-time, quarterly, yearly, or monthly prepayment patterns using the same loan inputs.
Will my bank produce exactly the same result?
Banks may round EMIs differently or apply prepayments on specific dates, so treat the result as a planning estimate rather than a lender statement.
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