Is prepayment penalised?

Prepay or invest?

Prepaying a loan versus investing the same money.

Investing leaves you ahead by

₹2,65,469

₹2.65 lakh

when the loan would have ended, in 15 years

Interest saved by prepaying: ₹9,88,521
Loan ends earlier by: 50 months
Prepay, then invest the freed EMI: ₹18,23,155
Invest the lump sum instead: ₹20,88,624

Prepaying earns a guaranteed, tax-free 8.5% (the interest you stop paying). Investing wins only if the after-tax return beats that reliably. Peace of mind counts too; many people prepay once their emergency fund and insurance are in place.

Wealth when the loan would have ended

PrepayInvest

What this calculates

Compare prepaying part of a loan with investing the same money. The comparison is made at the date the loan would originally have ended.

How it's calculated

Prepay: loan closes early; the freed EMI is invested until the original end date

Invest: lump sum × (1 + return)^years left

Results are illustrations based on the inputs you choose. Returns are not guaranteed and actual outcomes will vary. This is education, not advice.

Questions about this tool

RBI rules bar prepayment charges on floating-rate loans to individuals. Fixed-rate loans may carry a charge.