Prepay or keep savings
Pay off the loan, or keep the savings?
See what happens if you keep your savings, make a part payment or close the loan — with the bank's charges, tax, and what you keep for emergencies. Then try what-ifs: a rate rise, lower returns, an emergency.
Planning estimates for education — not financial advice. Rates and returns change.
Your loan
Thirty lakh rupees
Twenty-nine thousand five hundred forty-two rupees
At this EMI the loan is repaid in 15 yrs.
Of the amount you pay early — see the loan papers or ask the bank.
Used if blank: 0% — no charge (floating-rate home loans to individuals usually have none)
Your savings
Ten lakh rupees
Used if blank: 6.25% — usual for a fixed deposit (an assumption, not a promise)
Three lakh rupees
Usually 3–6 months of must-pay costs and EMIs. Never used to prepay.
Used if blank: ₹0 — nothing kept aside
Part payment
Five lakh rupees
Used if blank: now — before the next EMI
Used if blank: ₹0 — a single part payment
Used if blank: 15 yrs — until the loan would end at today's EMI
Keep the savings
Net worth then
₹19.02 L
Loan cleared in
15 yrs
Interest paid
₹23.18 L
Savings then
₹19.02 L
Part payment
Net worth then
₹25.79 L
Loan cleared in
10 yrs 10 mo
Interest paid
₹13.29 L
Paid early
₹5 L
Pay all you canBest over 15 yrs
Net worth then
₹27.81 L
Loan cleared in
9 yrs 6 mo
Interest paid
₹10.56 L
Paid early
₹7 L
What the numbers show
- 💡Over 15 yrs, “Pay all you can” leaves you ₹2.02 L better off than “Part payment” (net worth ₹27.81 L).
- 📌The loan costs about 8.5% a year; your savings earn about 4.4% after tax. Every rupee that pays the loan saves more than it would earn.
- 💡“Pay all you can” clears the loan in 9 yrs 6 mo instead of 15 yrs, saves ₹12.62 L of interest, and frees ₹29,542 a month after that.
- 📌Only savings above the ₹3,00,000 kept for emergencies are used, so closing the loan is limited to what is free.
Educational planning estimates, not financial advice.
Net worth: savings minus what you still owe
- Keep the savings
- Part payment
- Pay all you can
Savings counted after the tax due if sold then. Every option spends the same each month.
Loan still to repay
- Keep the savings
- Part payment
- Pay all you can
What if…
| Net worth after 15 yrs | Keep the savings | Part payment | Pay all you can |
|---|---|---|---|
| As entered | ₹19.02 L | ₹25.79 L | ₹27.81 L |
| Loan rate goes up 1 point | ₹11.96 L | ₹22 L | ₹24.9 L |
| Savings earn 2 points less | ₹15.53 L | ₹23.59 L | ₹25.94 L |
The best option in each row is in bold. In an emergency the money comes from savings; anything more is borrowed at about 12% a year until the monthly budget repays it.
Year by year
| Year | Keep the savings: savings / loan | Part payment: savings / loan | Pay all you can: savings / loan |
|---|---|---|---|
| 1 | ₹10.44 L / ₹28.97 L | ₹5.22 L / ₹23.52 L | ₹3.13 L / ₹21.35 L |
| 2 | ₹10.9 L / ₹27.84 L | ₹5.45 L / ₹21.92 L | ₹3.27 L / ₹19.55 L |
| 3 | ₹11.37 L / ₹26.61 L | ₹5.69 L / ₹20.17 L | ₹3.41 L / ₹17.59 L |
| 4 | ₹11.87 L / ₹25.28 L | ₹5.94 L / ₹18.26 L | ₹3.56 L / ₹15.46 L |
| 5 | ₹12.39 L / ₹23.83 L | ₹6.2 L / ₹16.19 L | ₹3.72 L / ₹13.14 L |
| 6 | ₹12.93 L / ₹22.25 L | ₹6.47 L / ₹13.94 L | ₹3.88 L / ₹10.61 L |
| 7 | ₹13.5 L / ₹20.53 L | ₹6.75 L / ₹11.48 L | ₹4.05 L / ₹7.86 L |
| 8 | ₹14.09 L / ₹18.65 L | ₹7.05 L / ₹8.81 L | ₹4.23 L / ₹4.87 L |
| 9 | ₹14.71 L / ₹16.62 L | ₹7.35 L / ₹5.9 L | ₹4.41 L / ₹1.61 L |
| 10 | ₹15.35 L / ₹14.4 L | ₹7.68 L / ₹2.74 L | ₹6.52 L / ₹0 |
| 11 | ₹16.02 L / ₹11.99 L | ₹8.72 L / ₹0 | ₹10.42 L / ₹0 |
| 12 | ₹16.73 L / ₹9.36 L | ₹12.72 L / ₹0 | ₹14.49 L / ₹0 |
| 13 | ₹17.46 L / ₹6.5 L | ₹16.89 L / ₹0 | ₹18.74 L / ₹0 |
| 14 | ₹18.22 L / ₹3.39 L | ₹21.24 L / ₹0 | ₹23.18 L / ₹0 |
| 15 | ₹19.02 L / ₹0 | ₹25.79 L / ₹0 | ₹27.81 L / ₹0 |
From 25 Oct 2026: every option spends today's EMI each month; whatever the loan no longer takes goes into savings at the same return.
How it's calculated
Month by month, each option spends exactly today's EMI. The loan charges interest on what is left; once it is cleared (or the EMI falls), the money it no longer takes goes into your savings. The part payment and its charge come out of savings above what you keep for emergencies.
Tax: FD and savings-account interest is taxed every year at your slab; debt funds at your slab and equity funds at 12.5% on gains above ₹1.25 lakh, when sold. Under the old tax regime, home-loan interest up to ₹2 lakh a year lowers your tax. Net worth is savings (after the tax due if sold then) minus what you still owe. Rules change — check the current ones.