EMI Calculator with Prepayment, Rate Change and APR

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Rules last checked on 9 October 2026. No interest rate is built in; type the one on your sanction letter. Prepayment charges follow the RBI (Pre-payment Charges on Loans) Directions, 2025 (RBI/2025-26/64, 2 July 2025). Rate resets follow RBI circular RBI/2023-24/55 of 18 August 2023. APR follows the RBI circular on the Key Facts Statement, RBI/2024-25/18 of 15 April 2024.

Short answer

A ₹50 lakh home loan at 8.5% for 20 years has an EMI of ₹43,391 and costs ₹54.14 lakh in interest. If you pay ₹1 lakh extra every March and keep the EMI as it is, the interest drops to ₹34.33 lakh and the loan ends 6 years 5 months early. Taking the same prepayments as a lower EMI saves ₹10.21 lakh instead. The formula is EMI = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1), where r is the yearly rate ÷ 12 ÷ 100 and n is the number of months.

Keep the EMI or lower it after a prepayment

A prepayment goes straight to the principal. You then choose what happens next, and the two choices cost very different amounts. If you keep the EMI, all of it still goes to a smaller balance, so more of each EMI is principal and the loan ends early. If you lower the EMI, the loan keeps its end date, but each month you pay back less principal than before, so the balance falls more slowly.

On the ₹50 lakh loan above, ₹1 lakh every March saves ₹19.81 lakh of interest if the EMI stays at ₹43,391. The same prepayments taken as a lower EMI save ₹10.21 lakh, and the EMI falls a little each year: ₹42,516 after the first March, ₹41,623 after the second. The lower EMI leaves more cash each month; keeping the EMI clears the loan sooner. The calculator shows both side by side for your numbers.

Interest on a ₹50 lakh, 8.5%, 20-year loan

₹1 lakh every March from March 2027, first EMI November 2026. Worked with this calculator.

When a floating rate changes

On a floating-rate loan the rate moves with the lender's benchmark. RBI's circular of 18 August 2023 says that at a reset the lender must let you choose a higher EMI, a longer tenure or a mix of both, and let you prepay at any time. It also bars a tenure stretch that leads to negative amortisation, where the EMI no longer covers the month's interest and the balance grows.

Say the ₹50 lakh loan moves from 8.5% to 9.5% after two years. Keep the EMI and the loan runs 4 more years, with ₹20.41 lakh more interest. Keep the end date instead and the EMI goes up to ₹46,384, with ₹6.46 lakh more interest. At 11% after one year, the month's interest (₹44,921) is more than the old EMI of ₹43,391, so keeping the EMI is not possible; to finish on time the EMI has to rise to ₹51,331.

The same circular requires a statement every quarter with the principal and interest recovered so far, the EMI, the number of EMIs left and the APR. Hold it up against the monthly schedule here.

Prepayment charges and APR

For floating-rate loans sanctioned or renewed from 1 January 2026, RBI's 2025 directions bar prepayment charges on loans to individuals for any purpose other than business. That holds for part or full prepayment, whatever the source of the money, and with no lock-in period. Fixed-rate loans can carry a charge under the lender's own policy; on a term loan it is worked on the amount you prepay, and it has to be disclosed in the sanction letter and the Key Facts Statement. A charge that was not disclosed cannot be levied. Type it in the prepayment charge box and the savings figures will subtract it.

The Key Facts Statement must also show the APR, the yearly cost of the loan with every charge counted. A ₹10,000 processing fee on a ₹5 lakh, 12%, 3-year loan means you receive ₹4,90,000 but repay EMIs worked out on ₹5,00,000, so the APR is 13.41%. On the ₹50 lakh home loan, a ₹50,000 fee lifts 8.5% to an APR of 8.64%.

Worked examples

₹50 lakh home loan, ₹1 lakh extra every March

Riya's ₹50,00,000 home loan is at 8.5% for 20 years, first EMI in November 2026. The EMI is ₹43,391. Her first EMI is ₹35,417 of interest and only ₹7,974 of principal, and 81% of what she pays in the first year (₹4,21,183) is interest. Left alone, the loan costs ₹54.14 lakh in interest and the last EMI falls in October 2046.

She pays ₹1,00,000 extra every March from March 2027 and keeps the EMI at ₹43,391. Fourteen prepayments, ₹14 lakh in all, end the loan in May 2040, and the interest comes to ₹34.33 lakh: ₹19.81 lakh less. If she takes the prepayments as a lower EMI, it falls a little every March, down to ₹11,525 by the end; the last March prepayment clears the loan in March 2046, and she saves ₹10.21 lakh.

₹5 lakh personal loan with a fee, prepaid after a year

Sameer borrows ₹5,00,000 at 12% fixed for 3 years and pays a ₹10,000 processing fee. The EMI is ₹16,607, the interest ₹97,859, and the APR 13.41%. His loan agreement has a 4% prepayment charge.

With his 12th EMI, in October 2027, he prepays ₹1,00,000 and keeps the EMI. Interest falls to ₹74,914 and the charge is ₹4,000, so he is ₹18,945 better off, and the loan ends 7 months early. Without the charge the saving would be ₹22,945.

Tips and tricks

How we would use it

Questions people ask

What is the EMI on a ₹50 lakh home loan for 20 years?

₹43,391 a month at 8.5%, with ₹54.14 lakh of interest over the 240 EMIs. At 8% it is ₹41,822, and at 9% it is ₹44,986.

Is it better to reduce the EMI or the tenure after a prepayment?

In rupees, cutting the tenure saves more. On a ₹50 lakh, 8.5%, 20-year loan, ₹1 lakh every March saves ₹19.81 lakh with the EMI kept and ₹10.21 lakh with the EMI lowered. A lower EMI leaves more cash each month. Which matters more depends on your budget.

Do banks charge for prepaying a home loan?

Not on a floating-rate loan to an individual for a non-business purpose sanctioned or renewed from 1 January 2026, under RBI's 2025 directions, for part or full prepayment. A fixed-rate loan may carry a charge, but only if it is disclosed in the sanction letter, the agreement and the Key Facts Statement.

How is EMI calculated?

EMI = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1). P is the loan, r is the yearly rate ÷ 12 ÷ 100, and n is the number of months. For ₹50 lakh at 8.5% for 240 months, r is 0.0070833 and the EMI is ₹43,391.

Why is my bank's EMI or schedule a little different?

Some lenders round the EMI up, count interest by the actual days in each month, or charge interest for the days between disbursal and the first EMI. A rupee or two a month is normal. A bigger gap usually means insurance or another charge is in the EMI; check the Key Facts Statement.

How much does a ₹5 lakh prepayment save on a home loan?

It depends on when you pay it. On the ₹50 lakh, 8.5%, 20-year loan with the EMI kept, ₹5 lakh paid after one year saves ₹15.91 lakh of interest and 4 years of EMIs. Paid after five years it saves ₹10.59 lakh; after ten years, ₹5.64 lakh.

Written by Bulan Sarkar, who checked the results by hand and against a second public calculator. Use it for planning; it isn't tax or investment advice.

Sources

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Tax for 2026-27 under both regimes, slab by slab, with the ₹12 lakh rebate and its marginal relief, employer NPS, surcharge, cess, monthly TDS and your marginal rate.