Prepay vs Invest Calculator for India
Quick answer
See whether your surplus works better as a loan prepayment or as an investment.
Add your loan details, expected return, and tax slab. The calculator shows the clearer choice.
How to use
- 1Enter your current loan balance.
- 2Add your interest rate and remaining tenure.
- 3Enter the surplus amount.
- 4Choose your expected investment return.
- 5Review the result and compare both options.
What changes the result
Loan rate
A higher loan rate makes prepayment more useful because each rupee saves more interest.
Time left
Prepayment usually helps more when many years are still left on the loan.
Investment return
Investing can win if your post-tax return is comfortably above your loan rate.
Tax impact
Old-regime home loan deductions and investment taxes can change the final answer.
Frequently asked questions
Should I prepay or invest?
Prepaying feels safer because the interest saving is guaranteed. Investing can win if returns are higher than your loan rate. Use your numbers to compare both.
When does prepayment help most?
Usually in the early years of the loan, when a bigger part of your EMI goes toward interest.
Will I lose tax benefits?
Maybe. If you use the old tax regime, lower interest may reduce your Section 24 benefit. The calculator includes this.
Should I reduce EMI or tenure?
Reducing tenure usually saves more interest. Reducing EMI is useful when you want lower monthly pressure.
Is there a prepayment charge?
Floating-rate home loans usually have no prepayment charge. Fixed-rate loans may have one, so check your lender statement.
What about FD returns?
FD returns are taxed at your slab rate. After tax, many FDs may return less than your home loan rate.
Does it include investment tax?
Yes. Equity gains and FD interest are compared after tax, based on the assumptions you choose.
What am I comparing?
You are comparing guaranteed loan-interest savings against the possible value of investing the same money.
Assumptions
Prepayment
We compare your loan with and without the lump-sum prepayment, using reducing balance EMI math.
Investment
We grow the same surplus at your expected return and show the post-tax value.
Limits
Actual results can change with rate revisions, taxes, fees, market returns, and your lender's rules.
This is an educational calculator, not financial advice. Check with a qualified advisor before making a loan or investment decision.