Worked Example: ₹5L prepayment on ₹25L loan @ 8.5%, 15 years left, 12% investment return
Inputs
- Outstanding Loan₹25,00,000
- Prepay Amount₹5,00,000
- Investment Return12% p.a.
Results
- Interest Saved~₹6,80,000
- Investment Gain~₹8,20,000
- RecommendationInvest (pre-tax)
When expected investment return exceeds loan rate, investing may beat prepayment — but consider risk, tax on gains, and peace of mind from being debt-free.
How Prepay Loan vs Invest (SIP) Calculator Works
Enter outstanding loan balance, rate, remaining tenure, prepayment amount, and expected investment return. We compare total interest saved from prepayment against lump-sum investment gains over the same period.
Frequently Asked Questions
Is prepaying always better?
Not always. If your expected investment return exceeds the loan interest rate after tax, investing may outperform prepayment.
Does this account for tax on investments?
No — returns are pre-tax estimates. Factor in capital gains tax for a complete picture.
Disclaimer
- This calculator gives you an estimate only. It is not a promise of exact results.
- This is general information, not personal financial, tax, or legal advice.
- You are responsible for your own decisions. Talk to a qualified professional when it matters.
- Banks and lenders may add fees, insurance, or a different interest method. Your real EMI can differ.
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