Loan Comparison & Prepayment

about this tool

Three questions about a loan

Which offer is cheapest? Enter two to four offers with their amount, rate, term and fees. Each gets its EMI, the interest over the whole term, the fees, and what you pay in all; they are ranked by APR, the rate the payments really work out to once the fees are counted. A fee is taken from what you receive while the whole amount is repaid, so 0.5% on 30 lakh lifts an 8.5% loan to about 8.57%. A flat-rate offer, where interest is charged on the whole amount for the whole term, is turned into the reducing-balance rate the others are quoted in.

What does prepaying save? Add one-off prepayments in a given month and regular extras every month, quarter, half-year or year, and choose whether prepaying keeps the EMI and ends the loan sooner, or keeps the end date and lowers the EMI. The result is the interest saved, the months saved, a year-by-year table and the full schedule as a CSV. A prepayment charge, if your loan has one, is taken off the saving.

Is refinancing worth it? Enter what is still owed, the rate and time left, the new rate and what switching costs. The result is the saving over the rest of the loan after that cost, the new EMI, and the month the savings first pay for the switch. When the new term is longer or shorter than the time left, that alone changes the total, so the saving the new rate would bring over the same months is shown as well.

How it is worked out

Interest is charged each month on the balance still owed, at a twelfth of the annual rate, and every amount is rounded to two decimals as a statement would be (for yen too, shown to the whole yen). The EMI is the standard P × i × (1 + i)ⁿ ÷ ((1 + i)ⁿ − 1), rounded to the nearest cent as lenders publish it, and the last payment takes whatever is left, a little more or less than the others. A rate and term so high that the EMI is almost all interest are refused, since a cent of rounding there compounds into a last payment far from the others. A flat-rate loan is charged its rate on the whole amount for the whole term, exactly. A prepayment comes off the balance after that month's EMI, and is never more than is owed. In the mode that lowers the EMI, the payment is worked out again over the months left after each prepayment.

APR here is the nominal annual rate, compounded monthly, at which the EMIs are worth exactly the amount received after fees, found by bisection; the effective annual rate beneath it compounds that over twelve months, which is how UK and EU lenders quote APR. It counts the up-front fees you enter, not charges a lender adds later. Rules on which fees go in differ: India's Key Facts Statement counts insurance, legal and valuation charges, while a US APR leaves some closing costs out, so enter what you want counted. In India a processing fee also carries 18% GST; add it to the other costs to count it.

What it leaves out

Rates that change during the loan, part-disbursed construction loans, payment holidays, and taxes on interest or relief on it are not modelled; nor is what the money saved could have earned elsewhere. Amounts above a trillion and terms over 50 years are not covered. Banks also round and date things their own way, so a statement can differ by a few rupees. Nothing you enter is stored or sent anywhere.

For one loan's schedule on screen with a yearly chart, and percentage sums, the percentage and EMI calculator has them; for what savings grow to, the compound interest calculator.

questions

Why compare loans on APR rather than the interest rate?

Because fees change what a loan really costs. A loan of 30 lakh with a 0.5% processing fee, before any GST on the fee, puts only 29.85 lakh in your hands while you repay the full 30 lakh, so the rate you are really paying is higher than the one quoted. APR is the rate at which the payments are worth exactly what you received after the fees; it puts a lower-rate loan with heavy fees and a higher-rate loan with none on the same footing.

Is it better to prepay to reduce the tenure or the EMI?

Reducing the tenure saves more interest. Keeping the EMI the same means the interest no longer due on the prepaid amount goes to repaying principal instead, so the balance falls faster and the loan ends sooner; lowering the EMI instead spreads the smaller balance over the same months, so more of it stays outstanding for longer. Lowering the EMI is the choice when the monthly payment is what strains the budget.

What is a flat interest rate really worth?

A flat rate charges interest on the whole amount for the whole term, even though you repay some of it every month, so it is much dearer than it looks: 10% flat over a year works out to about 18% on the reducing balance that banks normally quote. The tool works out that reducing-balance rate for any flat-rate offer, so it can be set against the others.

When is refinancing a loan worth it?

When the interest saved over the rest of the loan is more than everything switching costs: the new lender’s processing fee, legal and valuation charges, and any foreclosure charge the old lender takes. The tool also shows the month the monthly savings first add up to that cost; if you might sell or repay before then, the switch does not pay. A longer new term lowers the EMI but can raise the total interest, and the result says so.

Can a lender charge for prepaying a loan?

It depends on the loan and the country. In India, under the RBI’s Pre-payment Charges on Loans Directions, 2025, loans sanctioned or renewed from 1 January 2026 carry no prepayment or foreclosure charge when they are floating-rate loans to individuals for anything other than business, and most floating-rate business loans to individuals and micro and small enterprises are covered too, up to ₹50 lakh at some smaller lenders. Fixed-rate loans and older loans can still carry a charge, which must be in the Key Facts Statement. Enter any charge as a percentage of each prepayment, and the saving is shown both before and after it.