Last reviewed: 4 September 2026. Worked numbers use the same engines as the linked calculators. Not advice.
On a reducing-balance loan, interest next month is rate × outstanding. A lump-sum principal payment lowers that outstanding immediately. Whether the lender cuts EMI or tenure, interest saved is the interest that will never accrue on the amount you prepaid.
The prepayment calculator is the right page for this math. Foreclosure fees, if any, must be subtracted from “savings” by you — they are not a hidden bonus in the engine.
If the remaining tenure is short or the rate is already low, rupee savings shrink. If you have 24% credit-card debt, prepay that first.
Educational estimates only. Confirm with your bank, AMC or a registered advisor. Disclaimer · Methodology.