What one lump-sum prepayment saves: lower EMI or shorter tenure, interest saved and any prepayment charge.
What a prepayment does
A prepayment is a lump sum paid on top of the EMI that goes straight to the principal. After it you can keep the same EMI and finish sooner, or keep the end date and pay a lower EMI. Keeping the EMI usually saves more interest.
Interest saved = interest still to pay without the prepayment − interest after it
How it is worked out
- The outstanding principal is read from the schedule after the EMIs already paid.
- The prepayment is taken off that balance.
- The new schedule repays the reduced balance at the same rate, with the EMI or the end date kept as you choose.
Check before you prepay
Your loan agreement says whether prepayment is allowed and whether a charge applies; enter the charge to see the saving after it. The calculator assumes the interest rate does not change.
Results are worked out from the numbers you enter and are for planning only. They are not an offer, an approval or financial advice. Finobazaar does not assume any lender's rate or rules; the lender's loan agreement and its key fact statement decide the actual EMI and charges.