How this calculation works
Keep the original fixed-rate monthly payment, apply interest to each opening balance, then apply extra principal. Stop when the remaining amount is paid, clipping the final payment and any unused extra.
Balance after month = prior balance × (1+annual rate/1200) − regular payment − applied extraA worked example
A ₹1,00,000 balance at 12% nominal annual interest over 12 months has regular payment about ₹8,884.88. Adding ₹2,000 each month clears this model in 10 monthly periods, saving two.
Good to know
A fixed-rate term-reduction model with no prepayment charge or fee. Interest retains extra precision; the displayed schedule is rounded to paise. A lender’s actual dates, charges, rate changes and rounding may differ.
Reference: OpenStax: fixed-payment loan amortization (opens in a new tab) ↗
Extra principal changes later interest
The monthly interest charge is based on the balance before that month’s payment. Paying additional principal after the charge leaves a smaller balance for the next month. The regular payment is held fixed, so the modeled loan finishes earlier rather than being recast to a lower installment.
The default payment is about ₹8,884.88. Adding ₹2,000 each month clears the entered ₹1,00,000 balance in ten periods instead of twelve. The final payment is clipped to what remains; the tool does not pretend every planned extra amount is needed.
The loan refinance cost calculator replaces the rate and remaining term; prepayment instead keeps the original regular payment and applies extra principal.
Check when a lump sum actually arrives
A lump sum in month six is applied only if the loan is still outstanding then. If recurring extras have already cleared it, that late lump sum is unused. The amount of additional principal actually used makes that distinction visible.
The EMI calculator establishes a fixed-rate baseline without extra payments. The loan refinance cost calculator answers a different question by replacing the rate and term and including a separate upfront fee.
Contract rules remain separate from this schedule
This schedule retains precision internally and rounds table cells for display. Actual lenders can use different dates, rounding and prepayment rules. A charge can reduce the net benefit, and a floating-rate reset can change the future schedule.
The example excludes charges rather than assuming every loan is free to prepay. Use the actual lender’s instructions for principal allocation; a payment credited toward a future installment need not have the same effect as the principal reduction modeled here.
A few questions, answered
Does the regular payment fall after the extra payment?
No. It stays fixed and the modeled term shortens.
What if the lump sum exceeds the outstanding amount?
Only the amount needed to clear the balance and current interest is used.
Does the interest saving include a prepayment charge?
No. Charges and contract-specific treatment must be checked separately.