A home loan calculator with prepayment shows your revised EMI after a lump sum payment, using your outstanding balance, interest rate, remaining tenure, and prepayment amount. Use it to compare repayment options before you commit.
In summary
A home loan calculator with prepayment helps you decide between two options after you make a lump sum payment: a lower monthly EMI or a shorter loan tenure. Both reduce your total interest outgo, but they suit different financial situations.
Bajaj Finance offers home loans of up to Rs. 15 crore*, with interest rates starting at 7.25%* p.a. for salaried borrowers, and a repayment tenure of up to 32 years*. Running a prepayment scenario through the calculator before you transfer funds can help you make a more confident decision. The sections below cover when each option works better, how the calculator functions, and what to check before prepaying.
Should you reduce your EMI or shorten your tenure when prepaying your home loan?
When you make a prepayment on your home loan, your lender typically gives you a choice: bring down your monthly EMI or keep the EMI the same and close the loan earlier. Neither option is universally better. The right one depends on what you need most right now.
Reducing your EMI is useful when your monthly expenses have risen, you want to free up cash for other goals, or your income has become less predictable. A lower EMI gives you more room each month without requiring you to change your long-term financial plan.
Shortening your tenure works better when your income is stable, your monthly budget is manageable, and you want to pay significantly less interest over the life of the loan. The total savings on a long-tenure loan can be considerable, especially when property values in cities like Mumbai mean you are borrowing a large amount for many years.
| If your priority is | Lower EMI | Shorter tenure |
| Monthly cash flow | ✅ Yes | – |
| Paying less total interest | – | ✅ Yes |
| Faster loan closure | – | ✅ Yes |
| More monthly flexibility | ✅ Yes | – |
| Stable income, lower debt period | – | ✅ Yes |
One honest trade-off to keep in mind: a shorter tenure means the same or higher EMI continues until the loan closes. If your income dips in the interim, that can create pressure. A lower EMI gives you breathing room but keeps the loan active for longer, which means more interest paid over time.
How does a home loan calculator with prepayment work?
A home loan calculator with prepayment recalculates your EMI based on your current loan position after you enter a lump sum amount you plan to pay. Here is how to use it:
- Enter your outstanding principal – the remaining loan balance as of today.
- Enter your current interest rate – for example, 7.50% p.a.
- Enter your remaining tenure in months – for example, 216 months if you have 18 years left.
- Enter the prepayment amount – the lump sum you plan to pay toward the principal.
- View your revised EMI – the calculator shows the new monthly amount after the prepayment is applied.
Once you see the revised EMI, you can try different prepayment amounts to find what works for your budget. This is the real value of the tool: you can compare scenarios before you commit any funds.
Let’s consider the example of Sahil, a 38-year-old salaried professional with a home loan in Mumbai for a 2BHK in Thane. He has an outstanding balance of approximately Rs. 65 lakh at 7.50% p.a. and 15 years remaining. He receives an annual bonus of Rs. 5 lakh and wants to know how a prepayment of Rs. 4.5 lakh would affect his EMI, which is currently at Rs. 60,256.
Using the home loan prepayment calculator on the Bajaj Finance website, Sahil discovers that the prepayment will revise his EMI to the lower Rs. 56,084. He can now compare this revised EMI against his current EMI and decide whether the reduction suits his monthly budget, or whether he would prefer to keep the EMI unchanged and close the loan earlier.
If he chooses the revised EMI, he saves approximately Rs. 3 lakh in interest and gains breathing room in his monthly expenditure. If he continues with his current EMI, he can reduce his tenure by approximately 21 months, which will save him almost Rs. 8.33 lakh in total interest.
Property values in Mumbai, Thane, and Navi Mumbai often call for loan amounts above Rs. 50 lakh, and even a modest prepayment applied to a large outstanding balance over a long remaining tenure can produce a meaningful reduction in either the EMI or the loan period.
When does prepaying your home loan make sense?
Prepayment works best when you receive a lump sum that you do not need for other immediate obligations. Common situations include an annual performance bonus, maturity proceeds from a fixed deposit or insurance policy, an inheritance, or funds from the sale of another asset.
Before you prepay, consider two things:
- First, do not deplete your emergency reserve. Most financial planners suggest keeping 3-6 months of household expenses in liquid savings.
- Second, if you have other loans at higher interest rates, such as a personal loan or credit card outstanding, it often makes more financial sense to clear those first.
Prepayment is most effective in the early years of a loan, when a larger share of each EMI goes toward interest rather than principal. Per RBI’s guidelines on floating-rate retail loans, individual borrowers are not required to pay foreclosure or part-prepayment charges on floating-rate home loans. This makes periodic prepayment a cost-free option for most borrowers.
What should you check before making a prepayment?
Not all prepayment situations are the same. Here is what to review before transferring funds:
- Floating vs. fixed rate: Fixed-rate borrowers may be subject to charges, unlike floating-rate borrowers. Confirm your loan type before proceeding.
- Lender-specific terms: Read the prepayment clause in your loan agreement. Some lenders have a minimum prepayment amount or a lock-in period during which prepayment is restricted.
- Remaining tenure: If fewer than five years remain on your loan, the interest savings from prepayment are lower because most of the interest has already been paid in earlier EMIs.
- Available savings: Prepay only what you can genuinely spare. Do not commit funds you may need within the next 12 months.
- Financial goals: If you are saving for a child’s education or a planned expense within 2-3 years, weigh that against the interest you would save by prepaying now.
For individual borrowers with floating-rate Bajaj Finance Home Loans, part-prepayment and foreclosure for non-business loans carry no additional charges, subject to applicable terms. Beyond the prepayment facility, Bajaj Finance Home Loans come with a loan amount of up to Rs. 15 crore*, approval in 48 hours*, and interest rates starting at 7.25%* p.a. for salaried borrowers. These features make it worth reviewing eligibility if you are currently with another lender.
Who can apply for a Bajaj Finance Home Loan?
| Criterion | Details |
| Nationality | Indian citizen residing in India |
| Age | 23 to 67 years (salaried)23 to 70 years (self-employed) |
| CIBIL Score | 725 or above |
| Eligible occupations | Salaried employees, professionals, and self-employed individuals |
| Documents required | KYC documentsIncome proof (salary slips/ P&L statements)Business proof (self-employed applicants only)Bank statements for the last 6 monthsProperty documents |
How to apply online?
- Click on the ‘APPLY’ button on the Bajaj Finance Home Loan page.
- Enter your full name, mobile number, and employment type.
- Select the type of loan you wish to apply for.
- Generate and submit your OTP to verify your phone number.
- Enter additional details including your monthly income, required loan amount, and whether you have identified the property.
- Enter your date of birth, PAN, and other details as requested based on your occupation type.
- Submit your application. A Bajaj Finance representative will contact you and guide you through the next steps.
Making a considered decision
A home loan calculator with prepayment shows you exactly what changes after a lump sum payment. Whether a lower EMI or a shorter tenure suits you depends on your income stability, monthly commitments, and longer-term financial goals. Both outcomes reduce your total interest cost; they just do so in different ways and at different speeds.
If you are considering a home loan or reviewing your current repayment, use the Bajaj Finance Home Loan Repayment Calculator to estimate revised EMIs across different prepayment amounts. Visit the official website to know more and explore Bajaj Finance Home Loan options with amounts up to Rs. 15 crore*, tenures up to 32 years*, and interest rates starting at 7.25%* p.a.