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About the Personal Loan Prepayment Calculator
Personal loans carry the highest rates of any mainstream loan, so prepaying them first is almost always the right call when you have spare cash and several debts.
The one thing to check is the charge. Most personal loans are fixed-rate, which puts them outside the RBI's prohibition on prepayment fees, so lenders commonly levy 2–5% of the amount prepaid. Compare that against the interest saved above before you commit.
The formula
Because interest is charged on the reducing balance, every rupee of prepayment stops all future interest on that rupee.
Things worth knowing
Frequently asked questions
Most lenders allow it after 6–12 EMIs, sometimes limited to once or twice a year. Check your sanction letter for the lock-in and the charge.
Usually yes if significant tenure remains. A 2% charge against a 13.5% rate pays for itself within a few months of saved interest — the calculator above shows the net position.
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