Answer a few simple questions and we'll show you the smartest thing to do with your extra money — with the numbers behind it, in plain English.
Just three numbers from your latest loan statement.
We've filled in a typical rate — change it if your bank offers something different.
Your income tax slab
This option is clearly ahead of the next best choice.
Total financial advantage
₹5.20 L
Value you gain over the remaining 15y, after tax.
Smart insight
Every ₹1 you put into your loan saves you about ₹2.40 in interest — a guaranteed saving, with no market risk.
Based on your numbers, prepaying comes out ahead. Your loan effectively costs you 8.75%, and no guaranteed investment option beats that after tax — prepaying is the closest thing to a risk-free win here.
Every option is compared over the same time period, after tax.
Pay down your loan
Recommended₹5.20 L
You gain, after tax
Risk: None·Works out to 8.91% a year
Loan closes 2y 0m earlier
People who want a guaranteed outcome and peace of mind from lower debt.
The saving is certain — it doesn't depend on how markets perform.
Fixed deposit / RD
₹2.51 L
You gain, after tax
Risk: None·Works out to 5.57% a year
People who want guaranteed, predictable growth with zero market risk.
Your money stays relatively easy to access if you need it.
Balanced fund (mix of both)
₹4.04 L
You gain, after tax
Risk: Moderate·Works out to 7.65% a year
People comfortable with some market ups and downs in exchange for a shot at higher growth.
Moderate ups and downs, with a chance of higher growth than a fixed deposit.
Mutual funds (market-linked)
₹4.78 L
You gain, after tax
Risk: High·Works out to 8.48% a year
Long-term investors who won't panic during market drops and don't need this money soon.
Returns are not guaranteed and can move up or down along the way.
Numbers update instantly as you change your inputs — try a different amount to see how the recommendation shifts.
Prepaying a loan is a guaranteed, tax-free return equal to your interest rate. The planner re-amortises your outstanding balance with and without the extra money, so the saving shown is the actual interest you never pay — not an approximation.
Fixed-deposit and debt returns are reduced by your income-tax slab; equity returns are reduced by long-term capital gains tax. Comparing headline rates without this step is the most common reason people reach the wrong answer.
A guaranteed 8.5% saving is not the same as a hoped-for 12% return. The planner weighs your comfort with risk, your time horizon and whether you already hold an emergency fund before it recommends an action.
Compare your loan's interest rate with the return you can realistically earn after tax. If your loan charges 9% and a fixed deposit gives you roughly 5.2% after tax, prepaying wins because every rupee you repay saves a guaranteed 9%. If your loan is cheap (say a 7% home loan) and you are comfortable holding equity for 7+ years, investing usually wins. The planner above runs both paths on your actual numbers and tells you which one leaves you richer.
Yes, in most Indian home loans it is — but the benefit is front-loaded. In the first third of the tenure, the bulk of every EMI is interest, so a lump sum paid early can wipe out several rupees of future interest for each rupee you pay. The same amount paid in the final years saves very little, because by then you are mostly repaying principal.
It depends on your outstanding balance, rate and remaining tenure. As a rough guide, a lump sum paid in the early years of a 20-year home loan at 8.5% can save between ₹1.5 and ₹2.5 of interest for every ₹1 prepaid. The planner shows your exact saving in rupees, plus how many months earlier your loan closes.
Reducing the tenure saves far more interest, because you keep paying the same EMI but for fewer months. Reducing the EMI only improves monthly cash flow. Choose tenure reduction if your budget is comfortable, and EMI reduction if your monthly outgo is stretched.
For floating-rate home loans taken by individuals, the RBI does not allow banks and housing finance companies to levy foreclosure or prepayment charges. Fixed-rate home loans, personal loans, car loans and business loans can carry a charge — typically 2% to 5% of the amount prepaid. Always confirm the charge with your lender before you transfer money.
Always clear the most expensive debt first. A personal loan at 14–18% costs far more than a home loan at 8–9%, and it carries no tax benefit. Prepay the personal loan, then reassess the home loan.
It can reduce them. Under the old tax regime you may claim up to ₹2 lakh of home-loan interest under Section 24(b) and up to ₹1.5 lakh of principal under Section 80C. Prepaying lowers the interest you pay, so the deduction shrinks. Under the new regime there is no such deduction on a self-occupied property, so prepaying costs you nothing in tax terms. The planner factors your tax slab into the comparison.
You need a post-tax return higher than your loan's interest rate. If your home loan is 8.6%, an FD at 7% taxed at 30% only nets about 4.9% — clearly worse. An equity index fund averaging 11–12% before long-term capital gains tax can beat it, but only if you actually stay invested for the full period and accept the volatility.
Only if three things are true: your loan rate is low, your horizon is long (seven years or more), and market swings will not push you to sell early. Prepaying gives a certain, risk-free return equal to your interest rate. Equity gives a higher expected return with no guarantee. Many people split the difference — part prepayment, part SIP.
Almost never. FD interest is fully taxable at your slab rate, so a 7% FD nets roughly 4.9% in the 30% slab, while prepaying an 8.5% loan saves a guaranteed 8.5% tax-free. Keep in an FD only what you need for liquidity or an emergency fund.
Yes. Keep three to six months of expenses (including your EMI) in a liquid account first. Money paid into a loan is very hard to take back — most lenders will not hand it back if you lose your job. The planner overrides its own recommendation and tells you to build the buffer first if you say you do not have one.
Yes, and it is often the most practical answer. A common split is 50:50 — half towards the loan for a guaranteed saving and shorter tenure, half into a long-term investment for growth. The planner shows this split option alongside the pure prepay and pure invest paths.
A lump sum paid today saves more interest than the same total paid over a year, because the balance drops immediately. But a regular monthly extra is easier to sustain and compounds impressively over time — even ₹5,000 a month on a 20-year home loan can cut several years off the tenure.
Closing or reducing a loan on time is neutral to mildly positive. Your score may dip a point or two temporarily when an active credit line closes, but a clean repayment history and lower overall debt help far more than that short dip hurts.
Do not prepay if you have no emergency fund, if you are carrying costlier debt such as a credit-card balance or personal loan, if your lender charges a heavy foreclosure fee that erases the saving, or if the money is earmarked for a near-term goal like a down payment or school fees.
Usually not much. By the final years, most of the EMI is principal and very little interest remains to be saved. At that stage, investing the surplus generally leaves you better off — the planner will say so when your remaining tenure is short.
Fixed-deposit and debt returns are reduced by your income-tax slab, since that interest is added to your income. Equity returns are reduced by long-term capital gains tax. Loan prepayment savings are treated as tax-free, because interest you never pay is never taxed. That is why the comparison looks different from a simple rate-vs-rate check.
If your employer matches contributions, or you have unused 80C headroom under the old regime and a long career ahead, retirement savings usually win on tax-adjusted terms. If your loan is expensive or you are within a few years of retirement, clearing the debt first buys peace of mind and frees your monthly cash flow.
No. It is an educational comparison based on the numbers and assumptions you enter. Actual outcomes depend on your lender's terms, your tax situation and market performance. Confirm details with your lender or a registered adviser before acting.
No. Every calculation on this page runs in your browser. Nothing you type is sent to a server or saved to an account — recent scenarios are stored only on your own device.
