EMI
Work out the monthly instalment on a loan, the interest you pay in all, and what a prepayment saves.
Savings and loans
Home loan prepay or invest calculator
See the arithmetic of putting extra money into your home loan against investing it at a return you assume.
% a year
years
a month
The same amount either goes to the loan or gets invested.
% a year
An assumption you set, not a forecast. Try several.
%
Leave empty for none. Applied to the gain when the money is cashed out.
Enter a number from 0 to 60.
Prepaying ₹10,000 a month clears the loan in 9 years 2 months and saves ₹10.38 lakh of interest. At an assumed 10% return, the invest path is ahead by ₹1,11,531 on these assumptions.
- Loan-free if you prepay
- 9 years 2 months5 years 10 months before the plain schedule ends.
- Interest saved by prepaying
- ₹10,37,839≈ ₹10.38 lakh
- Net difference at 9 years 2 months from now
- ₹1,11,531The invest path is ahead by ₹1,11,531 on these assumptions.
- Difference at the original end, 15 years from now
- ₹2,95,711The invest path is ahead by ₹2,95,711 on these assumptions.
The invest path, over time
Tap or hover the chart, or use the slider, to read any year.
- Investment value, if you invest (after tax)
- Extra loan still owed, if you invest
After 9 years 2 months
Investment value, if you invest (after tax)
₹17,89,750
Extra loan still owed, if you invest
₹16,39,223
Year-by-year table
| Year | Investment value, if you invest (after tax) | Extra loan still owed, if you invest |
|---|---|---|
| 0 | ₹0 | ₹0 |
| 1 | ₹1,25,656 | ₹1,24,931 |
| 2 | ₹2,64,469 | ₹2,61,244 |
| 3 | ₹4,17,818 | ₹4,09,973 |
| 4 | ₹5,87,225 | ₹5,72,251 |
| 5 | ₹7,74,371 | ₹7,49,313 |
| 6 | ₹9,81,113 | ₹9,42,503 |
| 7 | ₹12,09,504 | ₹11,53,293 |
| 8 | ₹14,61,811 | ₹13,83,284 |
| 9 | ₹17,40,537 | ₹16,34,227 |
| 9.2 | ₹17,89,750 | ₹16,39,223 |
At the loan-free date, 9 years 2 months from now
- Prepay pathLoan cleared. Only the small leftover from the last month.
- ₹38,997
- Invest path: investment valueIncludes a gain of ₹6,89,750.
- ₹17,89,750
- Invest path: loan still owed
- ₹16,39,223
At the original end of the loan, 15 years from now
The prepay path invests the whole EMI and the extra money once the loan is cleared.
- Prepay path: investment value
- ₹38,48,993
- Invest path: investment value
- ₹41,44,703
- DifferenceThe invest path is ahead by ₹2,95,711 on these assumptions.
- ₹2,95,711
What this assumes
- The investment return is an assumption you typed. Real returns move and can be negative; a loan rate on a floating loan can change too.
- The extra money is paid or invested at the end of each month, and the investment grows at the yearly return divided by 12.
- Both paths show the arithmetic only. The page does not say which to choose.
What this does not do
- The income tax deduction on home loan interest and principal is not modelled. It would change the comparison.
- Prepayment charges, if any, and fees on the investment.
- Your need for cash in an emergency, or any risk of the investment falling.
- Which option is right for you.
What next
How it works
Say you have some extra money every month. You can put it into your home loan, which clears the loan sooner and saves interest, or invest it at a return you assume. The page runs both, month by month, and shows where each ends up. It shows both and does not say which to choose.
Invest path: value = value x (1 + j) + extra, each month, with j = return / 12
The prepay path sends the extra money to the lender on top of the EMI. When the loan is cleared, the page compares the investment value (less any tax you enter on its gain) with the loan still owed on the invest path. It also compares at the original end of the loan, when the prepay path has invested the whole EMI and the extra money since it became free.
A worked example
A balance of ₹30,00,000 at 8.75% with 15 years left and ₹10,000 extra each month clears the loan in 9 years 2 months if you prepay, saving ₹10,37,839 of interest. If the investment earns the same 8.75%, the two paths are level at that date (a difference of ₹0). At an assumed 10%, the invest path stands ₹1,11,531 apart from the prepay path at that date, in the invest path's favour on paper. Change the assumed return and the picture changes.
What it leaves out
- The tax deduction on home loan interest and principal, which is not modelled here.
- Tax on the investment beyond the single flat rate you may enter, and fees on it.
- A changing loan rate, a falling investment, or any risk.
- Your need for cash on hand.
Questions people ask
Which is better, prepaying or investing?
This page does not say. It shows what each path is worth on the loan rate and the investment return you enter, so you can see how sensitive the answer is to that assumed return.
Where does the investment return come from?
From you. It is an assumption, not a forecast, and real returns vary and can be negative. A loan saving, by contrast, is the interest you stop paying at the loan rate.
Is the tax benefit on a home loan included?
No. The deduction on interest and principal is not modelled. It can change the comparison, so check how it applies to you.
What does “net difference” mean?
At the date the loan would be cleared by prepaying, the invest path holds an investment but still owes part of the loan. The net difference is the investment value less the loan still owed, set against the prepay path, which owes nothing.
Why compare again at the end of the loan?
After the prepay path clears the loan, the money that went to the lender is free to invest. The second comparison counts that, so both paths cover the same period.