Loan prepayment calculator
See exactly how much interest a lump-sum part-payment saves on your loan, and decide whether to use it to finish sooner or to cut your monthly EMI.
Works for home, auto and personal loans on a reducing-balance basis — the standard EMI method used by banks and finance companies across Nepal. A planning-level tool, computed in your browser.
Loan & prepayment
The balance still owed on the loan today.
Nominal yearly rate on a reducing-balance basis.
Months left on the current repayment schedule.
Lump sum you pay over and above the regular EMI.
Keep paying the same EMI and finish the loan sooner.
Total interest saved
Rs 14,89,718
by keeping the EMI and shortening the term
Time saved
3 yr
Original EMI
Rs 55,270
New EMI
Rs 55,270
New balance
Rs 45,00,000
New tenure
12 yr
| Item | Before | After prepayment |
|---|---|---|
| Outstanding principal | Rs 50,00,000 | Rs 45,00,000 |
| Monthly EMI | Rs 55,270 | Rs 55,270 |
| Remaining tenure | 15 yr | 12 yr |
| Total interest | Rs 49,48,590 | Rs 34,58,872 |
A planning-level estimate on a reducing-balance loan. It assumes the prepayment is applied wholly to principal on the next instalment date, a constant interest rate and no part-payment fees. Real loans may charge a prepayment/foreclosure fee, reset rates periodically or round the EMI — confirm the terms with your bank or finance company. Computed in your browser; nothing is sent anywhere.
Less principal today, less interest tomorrow
On a reducing-balance loan, interest is charged on the outstanding principal each month, so paying down principal early lowers every future interest charge.
Apply the lump sum
Your part-payment is subtracted from the outstanding principal, leaving a smaller balance to amortise.
Choose the effect
Keep the EMI to shorten the tenure, or keep the tenure to recompute a lower EMI — using the standard EMI formula.
Compare interest
Total interest is EMI × months − principal. The drop from the original schedule is your interest saved.
Loan prepayment, answered
What is loan prepayment and how does it save interest?+
Prepayment (or part-payment) is paying a lump sum over and above your regular EMI. On a reducing-balance loan, interest each month is charged on the outstanding principal, so reducing that principal early means every future month accrues less interest. The earlier in the loan you prepay, the larger the saving.
Should I reduce the tenure or reduce the EMI after a prepayment?+
Reducing the tenure keeps your EMI the same but clears the loan sooner, which usually saves the most interest. Reducing the EMI keeps the same end date but lowers each monthly payment, easing cash flow while saving less interest. This calculator shows both so you can compare.
How is the EMI calculated?+
The equated monthly instalment uses the standard reducing-balance formula EMI = P · r · (1+r)^n / ((1+r)^n − 1), where P is the principal, r is the monthly interest rate (annual rate ÷ 12 ÷ 100) and n is the number of months. The same formula recomputes the new EMI or remaining months after a prepayment.
Do Nepali banks charge a fee for prepaying a loan?+
Many banks and finance companies in Nepal allow partial prepayment, but some charge a prepayment or foreclosure fee (often a small percentage of the prepaid amount), and terms differ by product and by whether the rate is fixed or floating. Always confirm the fee and any limits with your lender before prepaying.
Are the interest savings shown here exact?+
No — they are a planning estimate. The tool assumes the lump sum is applied entirely to principal on the next instalment date, a constant interest rate and no fees, and it rounds months up to whole instalments. Your bank's amortisation, rate resets, day-count and rounding may differ slightly.
Sources & data note
Based on the standard reducing-balance EMI formula EMI = P·r·(1+r)^n / ((1+r)^n − 1) and total interest = EMI × months − principal. The prepayment is assumed to apply fully to principal at a constant rate with no fees; months are rounded up to whole instalments. Bank amortisation, prepayment fees and rate resets vary — these figures are indicative and you should verify your loan's current rate and terms with your lender. Not financial advice.