Borrow What should I do with this prepayment?

Reduce EMI vs tenure calculator

Compare cash-flow relief vs interest saved — then tell the bank.

For your numbers

Enter your loan details to see which path costs less.

If you do nothing

Keep the loan as is

Monthly EMI
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Debt-free date
—
Interest still ahead
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Still to pay
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Lower EMI

Need cash flow

Smaller EMI · same debt-free date

Monthly EMI
—
Debt-free date
—
Interest you won’t pay
—
Back in your account / month
—

Same EMI, shorter loan

Want debt freedom

Same EMI · earlier debt-free date

Monthly EMI
—
Debt-free date
—
Interest you won’t pay
—
Years off the loan
—

When the loan leaves your life

If nothing changes

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Keep EMI · cut tenure

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Send this to your bank

Banks often default to lower EMI. Say which path you want.

Our read

Enter a part payment to see which path fits.

    Decision framework

    Can you live with the EMI?

    Both paths beat doing nothing. The fork is cash flow — not only which saves more.

    Need cash flow

    • Monthly cash flow feels tight
    • Single-income household or variable pay
    • Upcoming expenses (school fees, medical, renovation)
    • You want a buffer before rate resets

    You finish later, but the month feels lighter. Choose this when breathing room matters more than the last rupee of interest.

    Want debt freedom

    • Income is stable and EMI is comfortable
    • Goal is paying the least interest over time
    • You want the loan out of your life sooner
    • Emergency fund is already in place

    Harder month-to-month; freer sooner — and usually far less interest. Say so in writing; banks often default to cutting EMI.

    How it works

    Four steps before you instruct the bank

    1. 1 Pull your live numbers — outstanding balance, rate, remaining tenure, and EMI from the lender app or statement.
    2. 2 Enter the lump sum — only money you can spare after keeping an emergency buffer.
    3. 3 See the cost of each path — money you won’t pay vs years you get back.
    4. 4 Choose and confirm — tell the bank which option you want (use the copyable request below), then verify the revised schedule. Example: “Please apply my part payment of ₹X to reduce tenure, not EMI.”

    Next steps

    Go deeper on prepayment

    After you decide EMI vs tenure, model extras or check whether surplus should stay invested.

    Home loan EMI & prepayment calculator Monthly extras, step-up EMI, amortization schedule Prepayment vs investing When surplus should stay invested after tax and risk

    FAQ

    Reduce EMI vs reduce tenure — common questions

    Is it better to reduce EMI or tenure after prepayment?

    Reducing tenure usually saves more interest because you keep a similar EMI and finish earlier. Reducing EMI improves monthly cash flow but cuts interest less. Choose tenure if you can afford the EMI; choose EMI reduction when you need breathing room. Run your numbers in this calculator, then confirm with the full EMI calculator if you also want monthly extras.

    How much interest can prepayment save?

    It depends on outstanding balance, rate, remaining tenure, and whether the bank shortens tenure or cuts EMI. Early in the loan and with tenure reduction, savings are typically largest. Use the calculator above with your numbers for a clear estimate.

    Does reducing tenure always save more interest?

    On a standard reducing-balance home loan, keeping EMI and cutting months almost always saves more interest than cutting EMI and keeping the original end date. The gap is often several lakhs on large balances — check the insight line on this page for your case.

    What happens after a part payment on a home loan?

    The bank reduces your outstanding principal. You then choose (or request) either a lower EMI with the same tenure, or the same EMI with a shorter tenure. Ask the lender in writing which option they applied, and review the revised schedule. Use the copyable bank request on this page.

    Will the bank automatically reduce tenure after a part payment?

    Not always. Many lenders default to EMI reduction unless you specifically ask for tenure reduction. Do not assume they pick the option that saves you more interest — instruct them in writing and verify the new schedule.

    Does prepayment affect home loan tax benefits?

    Interest deduction under Section 24 applies to interest you actually pay in a year. Prepaying can lower future interest and thus that deduction over time. Principal repayment may still qualify under Section 80C within overall limits. If you are unsure whether to prepay or invest the surplus, read prepayment vs investing. Confirm tax treatment with a CA.

    Should I tell the bank to reduce tenure or EMI?

    If your goal is minimum interest and faster debt freedom, request tenure reduction. If cash flow is tight or large expenses are coming, request EMI reduction. Do not assume the bank automatically picks the option that saves you the most interest.

    You’ve got a path — lock it with the bank

    Copy the message above first. Then deepen the plan with extras or check whether leftover surplus should stay invested.

    Then model monthly extras Or compare prepay vs invest