Pay Early, Save Big:Home loan calculator with prepayment Guide With Real Examples (2026)
Use a home loan calculator with prepayment to plan early prepayment and reduce your borrowing cost and save on interest, without any penalty charges.
In summary
A home loan prepayment is any payment made towards your loan principal that is over and above your scheduled monthly EMI. Making a prepayment early in your loan tenure can reduce the total interest you pay over time. For example, on a loan of Rs. 60 lakh at 8.50% p.a. Over 20 years, a prepayment of Rs. 5 lakh in year three can lower your revised EMI and reduce your total interest outgo noticeably.
The Bajaj Finance Home Loan Repayment Calculator takes four inputs – your outstanding amount, interest rate, remaining tenure in months, and prepayment amount – and shows you the revised EMI instantly. This guide explains how the calculator works, when prepayment makes financial sense, and what charges, if any, apply to your loan.
How can early prepayment help you save on borrowing costs?
A home loan is repaid through EMIs, each of which includes a portion of principal and a portion of interest. In the early years of a long-tenure loan, the interest component of each EMI is higher. This is because interest is calculated on the outstanding principal, which is at its largest at the start. As the loan progresses, the outstanding balance falls, and so does the interest component.
Making a prepayment reduces your outstanding principal sooner. A lower principal means less interest accrues going forward. The earlier in the loan tenure you make a prepayment, the greater the potential reduction in total interest payable.
This is why many borrowers use a home loan calculator with prepayment to estimate the impact before committing to an extra payment.
When do borrowers usually consider prepaying a home loan?
Most borrowers consider prepayment when they receive funds that are not earmarked for immediate expenses. Common situations include:
Receiving an annual or performance bonus.
Receiving maturity proceeds from a fixed deposit, mutual fund, or insurance policy.
Getting an inheritance or a one-time financial windfall.
Experiencing a significant increase in regular income.
Looking to reduce monthly financial commitments before a major life event.
Borrowers whose names appear on the PM Awas Yojana Gramin list 2026 may get a government housing subsidy under PMAY‑G, which can reduce their payable principal and affect decisions about whether—and how much—to prepay a home loan.
Why use a Home loan calculator with prepayment?
The calculator removes guesswork. Instead of estimating broadly, you can see your exact revised EMI after entering a specific prepayment amount. This helps you make a more informed decision about the size and timing of your payment.
Situation | How the calculator helps |
You receive a bonus | Shows the revised EMI after prepayment |
You receive an inheritance | Helps estimate your new monthly payment |
You want lower monthly outgo | Shows the effect of different prepayment amounts |
You are reviewing your loan | Helps compare multiple prepayment scenarios |
The revised figure depends on how much of your loan is still outstanding and how many months remain in your tenure.
When does the timing of prepayment matter?
Situation | Possible outcome |
Prepayment made in the early years of the loan | Greater reduction in future interest outgo |
Prepayment made near the end of the loan | Smaller reduction in future interest outgo |
Multiple small prepayments over time | Can gradually lower the outstanding balance faster |
How to use a home loan calculator with prepayment in 5 steps
The calculator recalculates your EMI after reducing your outstanding loan balance by the prepayment amount. Here is how to use it:
- Enter your outstanding home loan amount.
- Enter your current interest rate.
- Add the remaining tenure in months.
- Enter the prepayment amount.
- View your revised EMI.
You can repeat the exercise with different prepayment amounts to understand how each amount changes your future EMI.
A practical example
Rehan is a 35-year-old software engineer based in Hyderabad. He took a home loan of Rs. 60 lakh at 8.50% p.a. for 20 years. His current EMI is approximately Rs. 52,069 per month. At the end of year three, he receives an annual performance bonus. Before deciding how to use it, he uses a home loan calculator with prepayment. He enters his outstanding principal of Rs. 56.09 lakh, his interest rate, the remaining tenure of 204 months, and a prepayment amount of Rs. 5 lakh. The calculator shows him a revised EMI of Rs. 47,428.
What can a revised EMI tell you?
Once you have your revised EMI figure, you can use it to answer a few practical questions:
Whether the new EMI fits your monthly budget.
Whether you can maintain the revised repayment comfortably over the remaining tenure.
Whether you should prepay now or wait until your finances are in a stronger position.
Whether different prepayment amounts lead to a more suitable EMI for your current situation.
What should you keep in mind before prepaying?
Paying early can reduce your total borrowing cost, but it is not always the right financial decision. Before making a large prepayment, consider:
Whether you have an emergency fund that covers at least 3-6 months of expenses.
Whether you carry higher-cost debt, such as a personal loan or credit card dues, that should be cleared first.
Whether major expenses are planned in the next 6-12 months, such as education fees or a medical procedure.
Whether the lower, revised EMI will improve your monthly cash flow in a meaningful way
Whether the existing EMI, should you choose to reduce tenure instead, still fits comfortably within your monthly budget.
Whether you prefer to keep more cash available for other financial goals
Before making a prepayment, it is also useful to understand whether any charges apply to your loan.
Are there any charges on home loan prepayment?
Whether you pay a fee on prepayment depends on the type of loan you hold and the purpose for which you took it.
Loan type | Charges |
Floating-rate home loan for non-business purposes | Nil |
Certain fixed-rate or business-purpose loans | Charges may apply |
Per RBI guidelines, lenders cannot levy foreclosure charges on floating-rate home loans taken by individual borrowers for non-business purposes. This applies across all scheduled commercial banks and housing finance companies regulated under the National Housing Bank (NHB) framework.
Individual borrowers with floating-rate home loans from Bajaj Finance can foreclose or part-prepay their loans without any additional charges.
Applying for a home loan from Bajaj Finance
Who can apply?
Criterion | Details |
Nationality | Indian citizen residing in India |
Age – salaried | ● 23 to 67 years (salaried) |
CIBIL Score | 725 or above |
Eligible occupations | Salaried employees, professionals, and self-employed individuals |
Documents required | ● KYC documents |
Step-by-step process for online application
Click on the ‘APPLY’ button on the Bajaj Finance Home Loan page.
Enter your full name, mobile number, and employment type.
Select the type of loan you wish to apply for.
Generate and submit your OTP to verify your phone number.
Enter additional details such as your monthly income, required loan amount, and whether you have identified the property.
Enter your date of birth, PAN, and other details as required based on your occupation type.
Submit your application and wait for a Bajaj Finance representative to reach out and guide you through the next steps.
Bajaj Finance Home Loans are available across Tier 1 and Tier 2 cities, including Hyderabad, Pune, Coimbatore, Rajkot, and Lucknow, with interest rates starting at 7.25%* p.a. for salaried borrowers and EMIs starting at Rs. 671 per lakh*.
A home loan calculator with prepayment helps you see one thing clearly: your revised EMI after making an extra payment towards your loan. By trying different prepayment amounts, you can decide whether making an additional payment works for your finances at this point. If you are reviewing your existing housing loan or considering a new one, the Bajaj Finance Home Loan Repayment Calculator can help you estimate your revised EMI in a few straightforward steps. Bajaj Finance Home Loans offer tenures of up to 32 years* and loan amounts of up to Rs. 15 crore*, with no foreclosure charges for individual borrowers on floating-rate loans.
FAQs
What is a home loan calculator with prepayment?
A home loan calculator with prepayment is an online tool that helps you estimate how an extra payment towards your loan principal affects your revised EMI, outstanding balance, and overall interest payable. It enables borrowers to compare different prepayment amounts before making a financial decision.
How does a home loan prepayment calculator work?
The calculator requires four basic inputs:
- Outstanding home loan amount
- Current interest rate
- Remaining loan tenure
- Prepayment amount
Based on these details, it instantly calculates your revised EMI after reducing the outstanding principal.
Does prepaying a home loan reduce interest?
Yes. Since interest is calculated on the outstanding principal, reducing the principal through prepayment lowers the interest charged on the remaining loan amount. The earlier you prepay during the loan tenure, the greater the potential savings.
Is there any penalty for home loan prepayment?
For individual borrowers with floating-rate home loans taken for non-business purposes, there are generally no foreclosure or part-prepayment charges as per RBI guidelines. However, charges may apply for certain fixed-rate or business-purpose loans.
When is the best time to prepay a home loan?
The ideal time is during the initial years of the loan because a larger portion of your EMI goes towards interest during this period. Early prepayments generally result in higher interest savings compared to prepayments made near the end of the tenure.
Should I reduce my EMI or loan tenure after prepayment?
It depends on your financial goals:
- Reduce EMI: Better if you want lower monthly expenses.
- Reduce Tenure: Better if your goal is to become debt-free sooner and maximize interest savings.
How much should I prepay on my home loan?
There is no fixed amount. Many borrowers use annual bonuses, incentives, investment maturity proceeds, or surplus savings for prepayment. Using a home loan calculator with prepayment helps determine the amount that best fits your financial situation.
Can I make multiple home loan prepayments?
Yes. Most lenders allow multiple part-prepayments during the loan tenure, subject to their terms and conditions. Multiple prepayments can gradually reduce the outstanding principal and overall interest burden.
What details are required to use a home loan calculator with prepayment?
You’ll generally need:
- Outstanding loan balance
- Interest rate
- Remaining loan tenure
- Proposed prepayment amount
The calculator then provides your revised EMI instantly.
Does a home loan calculator show exact savings?
The calculator provides a close estimate based on the information entered. Actual figures may vary depending on your lender’s repayment schedule, interest calculation method, and loan terms.
Can salaried and self-employed borrowers both use a home loan prepayment calculator?
Yes. The calculator is useful for both salaried and self-employed borrowers who want to understand how additional principal payments may affect their future EMIs and borrowing costs.
Why should I use the Bajaj Finance Home Loan Calculator with Prepayment?
The Bajaj Finance Home Loan Calculator with Prepayment allows you to quickly estimate your revised EMI after making a part-prepayment. It helps you compare different repayment scenarios, plan your finances more effectively, and make informed borrowing decisions before making an additional payment.
