Home Loan Prepayment Calculator

Prepaying a home loan with a bonus is one of the better rupee decisions many families make, but banks recompute either EMI or tenure, not a website. This page uses a rough tenure-cut sketch: prepayment ÷ (0.35 × EMI) in months. On a ₹34,713 EMI and a ₹2 lakh lump, that is about 16.5 months — indicative only, matching the EMI tool’s default instalment.

The cash-flow question

The couple in the EMI story (₹40 lakh, 8.5%, 20 years, ₹34,713) now has a ₹2 lakh bonus in Bengaluru. They want a feel for how many months might fall off. IndiaKit refuses to fake a full amortisation table and labels the 0.35 factor as a rough interest-share heuristic.

The maths on this page

Rough months reduced ≈ prepay / (EMI × 0.35). Defaults: EMI ₹34,713, prepay ₹2,00,000, rate 8.5% (rate is shown for context; the sketch is dominated by the 0.35 heuristic) → about 16.5 months.

Early in a 20-year loan, most of the EMI is interest, so a lump cuts more interest than the same lump in year 18. A proper amortisation would use outstanding principal, which this short form does not ask for.

Ask the lender for a foreclosure statement. RBI policy on floating-rate housing foreclosure charges has evolved; confirm the current rule with the bank.

₹2 lakh onto the ₹34,713 Whitefield EMI

Meera and Arjun, still on the ₹34,713 EMI from the home-loan example, drop ₹2,00,000 onto principal. IndiaKit’s rough sketch says about 16.5 months off tenure. The bank’s letter will be the real number; they ask for tenure reduction rather than a lower EMI because they can bear ₹34,713.

What a bank still has to confirm

Indicative heuristic, not an amortisation. Outstanding principal is not an input. Lender schedule wins. Rate field is not a full NPV engine here.

Common questions

Why 0.35 times EMI in the denominator?

It is a rough stand-in for the principal portion of a mid-life EMI so a lump can be translated into months. It will mislead at the very start or end of a loan. Use the bank’s statement.

Should I reduce EMI or tenure?

Tenure reduction usually saves more interest if you can keep paying the old EMI. That is a cash-flow choice, not a law.

Is the 8.5% used in the 16.5 months?

The displayed engine is the prepay/(0.35×EMI) sketch. Treat 8.5% as the loan’s rate for your own full calculation with the lender.