Loan Foreclosure Calculator: Is Closing Early Worth It?
See what closing your loan early costs and what it saves, with the foreclosure charge and GST counted. Free, no signup.
What to look at next
How it works
- Enter your loan. The original amount, the interest rate, the tenure in months and how many EMIs you have already paid.
- Set when you would close and what it costs. Choose how many months from now you would foreclose, and enter the foreclosure charge and GST from your loan agreement. Add the processing fee you paid, which is a sunk cost.
- Read the net saving. You see what you still owe, the total closure amount, the interest you have paid so far, the future interest you avoid and the net saving after charges.
Questions people ask
What is loan foreclosure?
Paying the full outstanding principal in one go so the loan closes before its tenure ends. You stop paying EMIs, and you avoid the interest that would have been charged on the remaining months.
Will my lender charge a foreclosure penalty?
It depends on the loan. Under the RBI's Pre-payment Charges Directions, 2025, in force since 1 January 2026, an individual with a floating-rate loan taken for a non-business purpose cannot be charged a prepayment or foreclosure penalty. Fixed-rate loans and floating-rate loans taken for business can still carry a charge, typically 2% to 5%, calculated on the amount prepaid. The 3% in the calculator is only a starting value, so replace it with the figure in your loan agreement, or 0 if none applies.
How do I know if foreclosing is worth it?
Compare the future interest you avoid with what closing costs you: the charge plus GST on it. If the saving is larger, closing helps. It helps most early in the tenure, when most of each EMI is interest. Late in the tenure little interest is left to save, so the net saving shrinks. Also check that the money you would use is not needed for an emergency fund or a higher-interest debt first.
Should I close the loan or make a part payment?
A part payment reduces the balance without closing the loan. Lenders handle it differently: some shorten the tenure, others lower the EMI. Shortening the tenure saves more interest. Closing fully removes the loan and the obligation. If you can only spare part of the amount, a part payment captures much of the saving.
Why does the calculator ask for the processing fee?
The fee was paid when the loan was disbursed and you do not get it back by closing early. It is shown so the full picture is in front of you, but it is a sunk cost: it should not change whether closing now makes sense.
Does closing a loan early affect my credit score?
A loan closed in full is reported as closed, which is not a negative mark. Your score can move a little in either direction for other reasons, such as your mix of loans changing, so closing early only to improve a score is not a reliable plan.
How accurate are the results?
They are illustrative. The exact closure amount depends on your lender's statement on the day, including interest accrued since your last EMI, so ask for the official foreclosure statement before you pay.
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