What is the Loan Prepayment Explorer?
Compare a single reducing-balance loan with and without an upfront part-payment and additional monthly payments. The existing URL is preserved; this is a Loan Prepayment Explorer, not a multi-loan strategy optimizer.
How does it work?
The regular EMI is derived from outstanding balance, annual nominal rate and remaining years. Monthly interest is added to the outstanding balance, then the payment is subtracted. The comparison applies the part-payment immediately and keeps the regular EMI plus your extra payment until payoff. It assumes a constant interest rate, month-end payments and no prepayment fees or tax effects.
Worked example
For Rs 1,20,000 outstanding at 0% over 1 year, the regular EMI is Rs 10,000. An immediate Rs 20,000 part-payment plus Rs 10,000 extra each month pays the remaining Rs 1,00,000 in 5 months. Interest is zero in both scenarios.
When to use this calculator
- 1Compare an entered single-loan prepayment scenario with its baseline.
- 2Explore the effect of an upfront payment versus extra monthly payments.
Common mistakes to avoid
- ✕Assuming this ranks multiple loans or models avalanche and snowball strategies.
- ✕Ignoring lender fees, restrictions or rate changes.
- ✕Treating interest avoided as an investment return or personalized recommendation.
Frequently asked questions
- Does this optimize multiple debts?
- No. The Debt Rescue comparison is the separate multi-debt tool. This page models one loan.
- Does it include prepayment charges or tax savings?
- No. Check those separately before interpreting the difference in modeled interest.