Prepayment Plan
EMI stays fixed; prepayments cut the principal so the loan finishes earlier.
Tenure stays fixed; the EMI is recomputed after each prepayment, so it gradually drops.
About EMI Calculator
Reduce Tenure vs Reduce EMI: which is better?
When you make a prepayment (part payment) on a loan, your bank lets you choose what happens to the saved money. You can either keep paying the same EMI and finish the loan sooner (reduce tenure), or keep the same end date and lower your monthly payment (reduce EMI). This calculator runs both scenarios side by side so you can see the exact interest saved.
What this tool does
- Calculates the EMI for any loan amount, interest rate and tenure.
- Models monthly, yearly, and one-time random-month prepayments together.
- Compares No prepayment, Reduce Term and Reduce EMI on total paid, interest paid, and amount saved.
- Shows the full month-by-month amortization schedule for each strategy.
- Saves named plans locally so you can compare different loans later.
How EMI is calculated
The EMI uses the standard reducing-balance formula
EMI = P x r x (1+r)^n / ((1+r)^n - 1), where P is the loan amount,
r is the monthly interest rate (annual rate / 12 / 100), and n is the
number of monthly installments. Reducing tenure typically saves more interest than reducing EMI
because the outstanding principal falls faster.
Frequently asked questions
What is the difference between reducing tenure and reducing EMI?
When you prepay a loan you can either keep the EMI the same and finish the loan earlier (reduce tenure) or keep the tenure the same and lower your monthly EMI (reduce EMI). Reducing tenure almost always saves more interest.
How is EMI calculated?
EMI = P x r x (1+r)^n / ((1+r)^n - 1), where P is the loan amount, r is the monthly interest rate (annual rate / 12 / 100), and n is the number of months.
What kinds of prepayments can I model?
You can add a fixed monthly prepayment, a yearly prepayment (applied in a chosen month each year), and any number of one-time prepayments in specific months.
Is my data sent anywhere?
No. All calculations run entirely in your browser. Saved plans are stored locally on your device and only synced if you have sync enabled on your account.