How prepaying a loan saves you money
Each monthly payment (often called the EMI) is part interest and part repayment. Interest is charged on what you still owe, so in the early years most of your payment goes on interest. Any extra amount you pay goes straight to reducing what you owe. From then on, every month’s interest is a little smaller, and more of each payment goes to repaying the loan. That is why even small, regular extra payments can take years off a long loan.
How to use the planner
- Your loan: enter the amount you still owe, the yearly interest rate and the time left. The planner works out your monthly payment. If your actual payment is different, type it in Monthly payment and the planner uses that instead. Next payment sets the month the dates start from.
- What does one extra payment do? Type any amount to see, instantly, what a single extra payment next month would save.
- Ready-made plans compare common approaches for your loan: paying 5% or 10% more every month, one extra payment a year or every six months, 5% of the loan once a year, or 10% of it once now. Press Use to copy one into your own plan.
- Your prepayment plan: add as many prepayments as you like. Each one has an amount, how often it happens (once, every month, every 3, 6 or 12 months, or every so many months you choose), the month it starts, and an optional month it stops. For example, a yearly bonus every December plus a small extra amount every month.
- Choose what happens after each prepayment. Finish sooner keeps your monthly payment the same, so the loan ends earlier and you save the most interest. Lower my EMI keeps the end date and reduces your monthly payment instead.
The results show the interest you save, how much sooner you’re debt-free (or your new monthly payment), your last payment date, and the total you prepay. The chart compares what you still owe with and without your plan. The Year by year table shows the interest you’d pay each year with and without the plan, what you save each year, the running total, and what’s left to pay. You can download the full month-by-month schedule as a CSV file for Excel or Google Sheets.
Worked example
Meera owes 50,00,000 rupees on a home loan at 8.5% with 20 years left. Her EMI is about ₹43,391, and over 20 years she’d pay about ₹54 lakh in interest. She adds one extra EMI every year, paid from her annual bonus. The planner shows the loan ends about 3 years 3 months sooner and saves a little over ₹10 lakh in interest. She then adds ₹2,000 more every month on top and sees the savings grow again, year by year.
Things to check with your lender
- Some loans charge a fee for prepaying, or allow only a certain amount each year. Fixed-rate loans are more likely to have these rules.
- Some lenders reduce your EMI rather than your term unless you ask. Tell them which one you want.
- Keep an emergency fund before you prepay. Money paid into a loan is hard to get back.
- The planner assumes a fixed interest rate. If your rate is floating, run it again whenever the rate changes.
FAQs
Is this the same as an EMI calculator? It does that too. Enter your loan and it shows your monthly payment and total interest. It then goes further by planning your prepayments.
Does it work for car loans, personal loans and mortgages? Yes, for any loan with fixed monthly payments and interest charged on the remaining balance.
Is my information saved? No. Everything is calculated in your browser, and nothing you type leaves the page.
Last updated 2026-11-07.