Urban Money

Personal Loan Pre-payment Calculator

  • 50 K
  • 1 Cr
Years
  • 1
  • 5
%
  • 8
  • 25
  • 1 K
  • NaN
EMI
  • 0
  • 59

Revised Monthly EMI

Key Takeaways:

Original EMI

Revised EMI

Savings in Interest

Personal Loan Prepayment Calculator

Save the interest amount and live your life swiftly without any stress! Prepayment of a personal loan simply means paying the principal amount before completing your loan tenure. You can partially or completely pay the principal amount.

You can also use the UrbanMoney personal loan prepayment calculator for understanding the EMI, the interest rate of prepayment, and other mandatory factors.

Personal Loan Prepayment Calculator Benefits

The personal loan prepayment calculator benefits are as follows:

Free from Debt Easily

To live a debt-free life without any stress, you can collect some amount and deposit it as a prepayment of the principal amount of your loan. Prepayment of personal loans also helps reduce EMI costs as the principal amount will be reduced by some percentage.

Lower the Burden

Prepayment of personal loans does not mean that you have to pay the complete amount at once. You can prepay your loan amount partially as well. Though you won't be able to save any amount on the interest, the debt will be a lot less that way. Prepaying your outstanding loan also decreases the unpaid principal amount. Thus, the EMIs will be down on the prevailing interest amount.

Prepayment of personal loans does not mean that you have to pay the complete amount at once. You can prepay your loan amount partially as well. Though you won't be able to save any amount on the interest, the debt will be a lot less that way. Prepaying your outstanding loan also decreases the unpaid principal amount. Thus, the EMIs will be down on the prevailing interest amount.

Save on Interest Amount

You must have sufficient funds to repay the complete loan amount in the earlier days of your tenure. Most banks and financial institutions have a one year lock-in period. It means that you cannot repay your loan amount partially or completely for a year. However, once the one year period is over, you can prepay the outstanding loan and save a good amount.

How Does a Personal Loan Prepayment Calculator Work?

A personal loan EMI calculator with prepayment helps revise the loan prerequisite of EMI. The prepayment personal loan calculator requires you to enter the loan amount, the tenure, and interest rates in its required fields.

If you are already repaying for a personal loan, the personal loan prepayment calculator would require the remaining loan amount, EMIs paid to date, the prepayment amount, interest rate, and tenure of your loan. You will learn how much money you will save on the EMIs using a personal loan EMI calculator with a prepayment option.

How to Use the Urban Money Prepayment Calculator?

You can use the Urban Money personal loan prepayment calculator by following the steps below.

Step 1: Enter the numbers and set a principal loan amount.
Step 2: Enter the time period for which you want a loan.
Step 3: Enter the interest rate of your preferred bank.
Step 4: Choose the Part Payment Amount.

You will now see the personal loan pre-closure calculator displayed on your screen and the revised tenure.

Factors Affecting Personal Loan Prepayment

The factors affecting personal loan prepayment are as follows:

Tax Benefits

The Income Tax Act, under Section 80C, allows Rs. 1.5 lakh from tax deduction annually. However, if you are doing full prepayment, you won't be able to avail any tax benefit. But, if you opt for partial prepayment, the tax benefits will decrease considerably.

Rate of Interest

The interest rate on personal loans is higher than that of home loans. This is why it is advisable to prepay the principal amount of your personal loan. You can use the personal loan prepayment calculator and calculate the rate of interest e to pay either partial prepayment or full to free yourself from debts.

Ideal Time in the Tenure

Prepayment of personal loans reduces the interest being charged on your principal amount. You can easily use the prepayment calculator for personal loans and see the outflow of interest. However, the interest will be higher in the initial years of your loan tenure. Thus, you must prepay the loan in the initial years. Also, if you prepay the amounts later, you won't be able to enjoy several benefits.

Charges Levied on Prepayment

If you prepay the principal amount, you will be charged 2% extra for the prepayment. Banks and other financial institutions levy these charges to safeguard them from the loss of interest they would have earned in the future.

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FAQs

From refinancing to reducing your interest, we have the answers right here.

How does interest calculation for EMI work if I prepay a loan?

You can easily calculate the prepayment amount using our personal loan prepayment calculator. This calculator will help you calculate the exact interest and the outstanding amount after the prepayment.

Can I prepay my personal loan without any extra charges?

If you pay the personal loan amount in the next six months after the disbursement of the loan amount, there will be no prepayment charges. However, a charge of 2.5% and GST will be levied on any prepayment amount. It will be over 25% of the principal due amount. Also, prepayment can only be done once every year.

Can I repay the personal loan earlier?

Yes, you can prepay your loan. However, if there are no charges for prepayment from your lender, repaying it is a great idea. You can actually save a lot of money.

Can I pre-close a personal loan with 10 EMIs?

Yes, you can choose the option of pre-closure for your personal loan within a year with a minimum of 12 EMIs. Also, while foreclosing the loan, you have to pay the EMI of the current month (if there are outstanding dues and foreclosure fees).

How are the pre-closure charges calculated for a personal loan?

A personal loan EMI calculator with prepayment can help you calculate the pre-closure charges efficiently. Further, you can know the difference between the original and the current interest rate. For instance, if the initial interest rate was 6.5% and the current is 4.5%, the difference is 2%. Multiply the principal amount by the difference (300,000 x 0.02 = 6000) to calculate the pre-closure charges.

What happens when you pay a personal loan early?

Paying off your loan before maturity is a great idea as it saves you a lot of money. You can end these monthly payments with no more interest charges. You can also use our personal loan prepayment calculator to know how much you can save by paying your loan amount.