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What is a Personal Loan Prepayment Calculator?

A Personal Loan Prepayment or (Part-Payment) Calculator is an online web tool that lets you see what will happen if you put some extra money into your loan, or even close it fully, before the original tenure finishes. It shows how much principal will reduce, how much future interest you may save, and if any bank charges will apply. It also clearly shows the result — either your monthly EMI goes down, or your loan time becomes shorter than before after the extra payment.

In India (2026), it has become more useful because As per The Times of India, RBI rules allow many floating-rate loans to be closed without penalty. So, before actually paying at the Loan app or Bank app, you can first check the numbers and decide properly if prepayment or foreclosure is worth it.

Especially helpful for fixed-rate loans where charges still exist. Instead of guessing, it checks your current loan position and tells you in simple terms:

• How much of the loan balance will be immediately reduce
• How much future interest will you avoid paying
• whether your EMI becomes smaller
• Or how many months are left after extra pay?

In short, it answers: “If I pay extra today… is it actually worth it?”

Do foreclosure and part payment personal loans both apply fees?

Foreclosure (full repayment) and prepayment (partial payment) of personal loans can have charges. Most lenders usually take around 2% to 5% of the outstanding principal, and GST is added on that fee. Banks keep this mainly because when you close early, their future interest earning stops.

However, some lenders now give relaxation — a few banks like IDFC FIRST Bank even offer zero foreclosure charges in certain cases, so it is always better to confirm your loan policy once before making payment.

How does Calculator works And How to Use It Correctly –

Step 1 — Enter your loan details

You just fill in basic information (you can easily see in your loan app, statement, or EMI SMS):

• Your original total loan amount
• Your Fixed interest rate
• Total months of loan
• EMIs already paid
• An extra amount you want to pay (Your part-payment)

After you enter, the calculator quietly rebuilds your loan inside, almost like a bank statement ledger only.

Step 2 — It finds your real outstanding balance

Most people calculate like: Loan − (EMI × months paid)

But a bank never works like that. In starting EMIs, the bank mostly recovers interest first, not principal. So, even after many payments, the pending loan still looks high — this is where people get confused. The calculator checks month-by-month and finds the actual principal remaining.

Step 3 — Extra payment is applied

Your extra payment directly reduces principal: New Balance = Outstanding Loan − Extra Payment. After this, interest is charged only on the smaller amount. Here only your real saving begins.

Step 4 — Two options are calculated automatically

Option A — Reduce Your Monthly EMI

• Loan time or tenure same as before, just EMI goes down
• Monthly paying becomes lower
• Helpful if the monthly budget is tight
• It is best to fix your monthly income + your monthly EMI amount.

Option B — Reduce Tenure

• EMI stays the same
• Loan finishes earlier than the selected months.
• Maximum interest savings

Real Example

let’s take an real life example:

• Loan: ₹3,00,000
• Interest: 12%
• Tenure: 36 months
• EMIs paid: 12
• Extra payment today: ₹50,000

After 12 EMIs, many people think the balance is ₹2 lakh. Actually, it is around ₹2.3 lakh, because early payments mostly went into interest. Now you pay ₹50,000 extra.

New balance = ₹2,30,000 − ₹50,000 = ₹1,80,000

From next month, the bank charges interest only on ₹1.8 lakh instead of ₹2.3 lakh.

Result shown by the calculator =

• If EMI reduction is selected = Your Monthly EMI becomes smaller, and your budget gets relaxed.
• If tenure reduction is selected = Loan may finish about 6–10 months early, and the interest saving becomes highest.
• Estimated saving: roughly ₹15,000–₹25,000, depending on the interest rate.

Many people prepay immediately after a bonus, a PF withdrawal, or savings. But sometimes: benefit is very small, or bank charges eat the savings. This tool lets you check first, then pay — so no regret later.

Expert tip: Personal loans use a reducing balance method. Every month, interest is calculated on the remaining loan. So when you reduce principal early → future interest automatically drops. Earlier, you prepay a bigger benefit.

Top 7 Features & Benefits of the Loan Part-Payment Calculator

1. Top Features

1. Try Different Payment Amounts = You can enter any extra payment — ₹5,000, ₹20,000 or even ₹1 lakh — and immediately see what changes. Helpful when bonus, PF withdrawal, or savings you want to use.
2. EMI Reduce or Tenure Reduce Option = This Calculator shows both choices: either your monthly EMI becomes smaller, or your loan finishes earlier. You can compare which feels comfortable for your budget.
3. Instant Interest Saving View = It quickly shows how much future interest you avoid paying. Many people don’t realize even one extra payment can save thousands.
4. Repayment Schedule Breakdown = Advanced view gives a month-wise idea, how much EMI goes to interest and how much to principal, before and after prepayment.
5. Full Foreclosure Amount Estimate = If you want to close the loan completely, it estimates the total payable amount, including pending interest and possible bank charges. Alternatively, you can use this Personal Loan Closure Calculator.
6. Easy Adjustment (No Maths Needed) = You can change rate, tenure, or EMIs paid — result updates instantly. No need to calculate manually or visit the branch again and again.
7. Current Outstanding Check = By entering EMIs already paid, it shows your approximate present balance. Many customers think the loan reduced a lot, but the actual principal is still high.

2. Best Benefits

• 1. Big Interest Savings = Because interest is calculated on the remaining principal, your early payment reduces the total cost of the loan noticeably.
• 2. Faster Debt-Free Life = Loan finishes early, so salary becomes free for savings, SIP, or family expenses instead of EMI.
• 3. Better Credit Profile = Closing loan properly (marked “Closed”) improves overall credit behaviour in the long run.
• 4. Clear Decision Before Paying = You can check first if savings are more than foreclosure charges — prevents wrong financial decision.
• 5. Monthly Cash Flow Relief = If EMI reduces, your monthly budget becomes easier — especially helpful when multiple EMIs running.
• 6. Full Transparency = It shows where every rupee goes — principal, interest, and charges — so bank calculation won’t confuse you.
• 7. Planning Support = You can align loan closure with real life goals — like before home loan, business plan, or child education — instead of guessing.

In short, the calculator works like a “trial run” before actually closing or prepaying your loan, so you go to the bank already prepared.

EMI Reduction vs Tenure Reduction — Fixed-Rate Personal Loan (Which Better?)

Point	Tenure Reduction	EMI Reduction
What changes	Loan period becomes shorter	Monthly EMI becomes smaller
EMI amount	Same as before	Immediately decreases
Loan end date	Comes earlier	Stays original
Interest paid	Lowest (maximum saving)	Higher than tenure reduction
Penalty impact	Charges recover faster due to big interest saving	Charges feel heavier because saving is less
Best for	Stable salary, no monthly pressure	Tight budget or irregular income
Total cost of loan	Minimum overall payment	More total payment
Financial effect	You become debt-free early	You get monthly cash relief
Risk of default	Same as before	Lower (easier to pay EMI)
Practical advice	Choose if you can afford EMI	Choose if EMI is stressing your budget

FAQs