A home loan prepayment calculator shows you the revised EMI on your outstanding loan balance after a part-payment – so you can compare amounts before committing.
In summary
A windfall – a performance bonus, a maturing fixed deposit, or an insurance payout – can reduce what you owe on a home loan. Whether that is the right move depends on your loan stage, your emergency savings, and what else the money could do.
A home loan prepayment calculator takes your outstanding balance, current interest rate, remaining tenure in months, and proposed prepayment amount, then returns a revised EMI. That single output can shift how you see the decision.
Bajaj Finance offers home loans of up to Rs. 15 crore* with interest rates starting from 7.25%* p.a. and tenures of up to 32 years*. Individual borrowers on a floating rate pay no foreclosure charges, subject to applicable terms.
Should you use your bonus to prepay your home loan?
There is no single correct answer. The right call depends on where you are in your loan, what your savings look like, and what returns the money could earn elsewhere.
In the early years of a loan, a larger share of each EMI goes toward interest. A prepayment at that stage can reduce the total interest you pay over the remaining tenure. Later in the loan, more of each EMI covers principal, so the interest saving from a prepayment is smaller.
Your interest rate also matters. If your home loan rate is 9% p.a. and your savings account earns 3.5% p.a., keeping the money invested earns less than the interest you save by prepaying. If a well-managed equity fund has returned 12% p.a. over the last five years, that comparison shifts.
| If you prepay | If you keep the money invested |
| Outstanding loan balance falls | Money stays available for use |
| Future interest reduces | Investment may earn returns |
| Revised EMI is lower | Market returns are uncertain |
| Less total debt | Home loan runs its full course |
Neither column is automatically better. Your situation determines which works harder for you.
How does a home loan prepayment calculator help you decide?
A home loan prepayment calculator converts a financial question into a concrete number. Instead of guessing what a Rs. 2 lakh prepayment does to your EMI versus a Rs. 5 lakh prepayment, you can see the revised EMI for each scenario in under a minute.
Use the calculator in four steps:
- Enter your current outstanding loan balance.
- Enter your applicable interest rate.
- Enter your remaining tenure in months.
- Enter the prepayment amount you are considering.
The calculator returns your revised EMI after that part-payment. You can repeat the process with different prepayment amounts to compare outcomes before you commit any money. The same bonus can produce very different results at different loan stages, so running two or three scenarios takes two minutes and gives you a factual basis for the decision.
When does prepaying usually save more interest?
The earlier in your loan tenure you make a prepayment, the more interest it can save. Home loan interest in the early years is calculated on a higher outstanding balance, so reducing that balance sooner has a larger effect.
Prepayment tends to save more when:
- Early loan years: A large part of your EMI is still interest, not principal.
- High outstanding balance: More principal means more interest accruing each month.
- Floating rate loans above 8.50% p.a.: The interest saving from reducing the balance is larger.
- Windfall received in years one to five: Maximum remaining tenure means maximum interest-saving potential.
A larger prepayment can reduce future interest meaningfully, but it also reduces your available cash. Keep at least 3-6 months of expenses in an accessible fund before committing a lump sum to the loan.
When might you keep the money instead?
Not every bonus should go toward a home loan. There are situations where holding the money is the more considered choice.
- Higher-interest debt exists: A personal loan at 14% p.a. or a credit card balance at 36% p.a. costs more than most home loan rates. Clear those first.
- Large expenses are coming: School fees, a medical procedure, or a planned move – if you can see the expense, reserve the cash.
- Retirement corpus is underfunded: If you are 45 or older and your retirement savings are below target, that gap may matter more than a smaller home loan balance.
- Emergency fund is thin: If accessible savings fall below three months of expenses, a prepayment adds financial risk without a clear safety net.
Comparing two bonus decisions with a home loan prepayment calculator
Rahul is 34, works as a senior analyst in Bengaluru, and receives an annual performance bonus. He took a home loan in Bangalore three years ago to buy a 2BHK in Whitefield.
His outstanding balance is Rs. 42 lakh. His remaining tenure is 20 years (240 months). His applicable interest rate is 8.50% p.a., and his current EMI is Rs. 36,449. This year, his bonus after tax is Rs. 4.50 lakh.
Rahul opens the Bajaj Finance Home Loan Prepayment Calculator and enters all four inputs with the full Rs. 4.50 lakh as the prepayment amount. The calculator returns a revised EMI of Rs. 32,543. He then enters Rs. 2.25 lakh to see what a lower prepayment would do. The revised EMI for that scenario is Rs. 34,496.
With both numbers in front of him, Rahul compares the EMI reduction against his emergency fund (currently Rs. 1.80 lakh, which is below three months of expenses). He decides to put Rs. 2 lakh toward the loan and Rs. 2.50 lakh into a liquid fund to build his emergency buffer first.
How does Bajaj Finance support home loan prepayments?
Per RBI guidelines, individual borrowers with floating-rate home loans are not required to pay prepayment or foreclosure charges. This applies to Bajaj Finance floating-rate home loans as well, subject to the applicable terms of your loan agreement.
How can you apply for a Bajaj Finance home loan?
Ensure you meet the eligibility criteria and have the required documents in order:
| Criterion | Details |
| Nationality | Indian citizen residing in India |
| Age | 23 to 67 years (salaried)23 to 70 years (self-employed) |
| CIBIL Score | 725 or above |
| Eligible occupations | Salaried employees, professionals, and self-employed individuals |
| Documents required | KYC documentsIncome proof (salary slips/ P&L statements)Business proof (self-employed applicants only)Bank statements for the last 6 monthsProperty documents |
This is an indicative list and may change based on your loan application.
Online application process
- Click on the ‘APPLY’ button on the Bajaj Finance Home Loan page.
- Enter your full name, mobile number, and employment type.
- Select the type of loan you wish to apply for.
- Generate and submit your OTP to verify your phone number.
- Upon OTP verification, enter your monthly income, required loan amount, and whether you have identified the property.
- Enter your date of birth, PAN, and other details as requested, based on your occupation type.
- Click on ‘SUBMIT’. A Bajaj Finance representative will contact you and guide you through the next steps.
Things to check before making a part-prepayment
Run through this list before you transfer the money:
- Outstanding balance: Know the exact amount, not an estimate.
- Remaining tenure: Confirm the months left on your loan.
- Emergency savings: Do you have 3-6 months of expenses in liquid form?
- Your interest rate: Is it floating or fixed? What is the rate?
- Other debt: Is there higher-cost debt that should be cleared first?
- Future expenses: Are large, known costs coming in the next 12 months?
- Loan terms: Check your loan agreement for any part-prepayment conditions.
- Tax implications: Under Section 24(b) of the Income Tax Act, interest paid on a home loan is deductible up to Rs. 2 lakh per year for a self-occupied property. A prepayment reduces future interest, which also reduces this deduction. Factor that in if you are claiming it.
A bonus or maturity payout can reduce your future loan burden, but only when it fits the wider shape of your finances. A home loan prepayment calculator gives you a practical way to compare different prepayment amounts before making the decision.
If you are planning a new home purchase or refinancing an existing loan, Bajaj Finance offers home loans of up to Rs. 15 crore*, repayment tenures of up to 32 years*, and EMIs starting from Rs. 671 per lakh*, subject to eligibility and applicable terms.
