🏠 Home Loan Prepayment Calculator
Discover the magic of partial loan prepayments. Even an extra ₹5,000 paid monthly can shave off years of EMI and save lakhs in interest.
Why the Prepayment Math is Mind-Blowing
The Heavy Burden of Initial Years
In a standard Home Loan, the EMI remains constant, but the composition changes drastically. During the first few years (e.g., Year 1 to Year 5), almost 80% of your EMI goes strictly towards paying the bank’s interest. Only 20% actually reduces your principal!
How Prepament Hacks the System
When you make an “Extra Prepayment” (say, ₹50,000 as a lump sum or ₹5,000 every month), that money bypasses the interest bucket entirely. 100% of it is immediately deducted from your Principal loan amount.
The Compounding Effect in Reverse
Because your Principal is suddenly smaller, the interest calculated by the bank next month is automatically smaller. This creates a domino effect where you don’t just save the prepayed amount, you save the years of compounding interest that the prepayed amount would have incurred.