Calculate interest savings and tenure reduction achieved by making partial loan prepayments.
Result
Assumes extra payments are applied directly against principal on a floating rate basis.
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Reducing balance amortization with periodic capital reduction
₹35 Lakh loan at 8.5% for 18 yrs with ₹5k extra monthly + ₹2 Lakh lump sum.
Interest Saved: ~₹15.42 Lakh | Tenure Reduced: 4.8 Years.
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Open calculatorUnder Reserve Bank of India (RBI) guidelines, banks and housing finance companies cannot charge prepayment penalties on floating-rate home loans sanctioned to individual borrowers.
Reducing tenure saves substantially more total interest over the life of the loan. Reducing EMI lowers monthly outgo but keeps interest compounding longer.
Because early loan payments are heavily interest-weighted, prepaying even modest sums in the first 5 to 7 years directly cuts into the loan principal, yielding exponential interest savings.