Business loan prepayment and foreclosure calculator

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Work out what prepaying saves

Use the balance and rate on your latest loan statement. To close the loan, enter the whole balance as the prepayment. The boxes open on an example.

Balance still owed ₹

Interest rate % a year

The rate on your loan statement. The example uses 14%, not a market rate.

EMIs left months

Amount you will prepay ₹

Prepayment charge, if any % of the amount prepaid

From 01-Jan-2026 most lenders charge nothing on floating-rate business loans to individuals and micro and small enterprises. For other loans, use the charge in your sanction letter.

After the prepayment

Keep the EMI, finish sooner

Keep the tenure, lower the EMI

Net saving after any charge ₹90,558

These are the example figures. Change any box to use your own.

Keeping the EMI of ₹34,178, the loan ends in 28 months instead of 36.

Interest left without prepaying: ₹2,30,395
Interest left after prepaying: ₹1,39,837
Interest saved: ₹90,558
Prepayment charge: ₹0

Arithmetic on the figures you enter, assuming the rate does not change. Your lender's statement shows the exact payoff amount.

How it is calculated

How the saving is worked out

The calculator compares the interest left on the loan with and without the prepayment, then takes off any charge.

Without prepaying

interest left = EMI × months left − balance

The EMI is the standard formula on the balance, the rate and the months left.

After prepaying

saving = interest left before − interest left after − charge

Keeping the EMI, the lower balance is repaid month by month at the old EMI until it is cleared. Keeping the tenure, a new EMI is worked out on the lower balance over the same months.

Where the rules come from

Where each figure on this page comes from
Figure	Source	Checked
From 01-Jan-2026, no prepayment charge on floating-rate business loans to individuals and micro and small enterprises at most lenders	RBI notification, 02-Jul-2025	02-Oct-2026
Outside that rule, a term loan charge is on the amount prepaid, and nothing is charged when the lender asks you to prepay	RBI notification	02-Oct-2026
Whether a prepayment charge applies must be stated in the sanction letter, the agreement and the Key Facts Statement	RBI notification	02-Oct-2026

Worked example

Worked example: ₹2,00,000 prepaid on ₹10,00,000

An example loan: ₹10,00,000 still owed, 36 EMIs left, an example rate of 14% a year, so the EMI is ₹34,178. No prepayment charge.

Prepayment saving worked both ways
After prepaying ₹2,00,000	EMI	Months left	Interest left	Interest saved
No prepayment	₹34,178	36	₹2,30,395	-
Keep the EMI, finish sooner	₹34,178	28	₹1,39,837	₹90,558
Keep the tenure, lower the EMI	₹27,342	36	₹1,84,316	₹46,079

Closing the whole ₹10,00,000 instead saves ₹2,30,395 of interest. If the loan carried an assumed 4% foreclosure charge, that would cost ₹40,000, leaving a net saving of ₹1,90,395. On a floating-rate loan to a micro or small enterprise, most lenders may not charge it at all from 01-Jan-2026.

Know the limits

Limits of this calculator

It assumes the rate stays the same for the rest of the loan. A floating rate can change.
It assumes the prepayment is made just after an EMI. Interest for part of a month and any GST on a charge are not included.
If your loan carries a CGTMSE guarantee, ask your lender to mark the closure promptly. See the CGTMSE fee guide for when a fee refund is possible.
For the cost of a new loan, use the business loan EMI calculator.

Good to know

Questions and answers

Straight answers on the method, the sources and what the numbers do and do not mean.

How much interest does prepaying a business loan save?

It saves the interest the prepaid amount would have carried for the rest of the tenure. On ₹10,00,000 owed over 36 months at an example 14% a year, prepaying ₹2,00,000 and keeping the EMI saves ₹90,558 in interest and ends the loan 8 months early.

Is it better to reduce the EMI or the tenure after a prepayment?

Keeping the EMI and shortening the tenure saves more interest. In the example it saves ₹90,558, against ₹46,079 if you keep the tenure and lower the EMI to ₹27,342. A lower EMI frees cash each month, which some businesses need more.

Is there a prepayment charge on a business loan?

From 01-Jan-2026, commercial banks and upper-layer NBFCs (non-banking finance companies) charge nothing for prepaying a floating-rate business loan to an individual or a micro or small enterprise, and smaller lenders such as small finance banks charge nothing up to ₹50,00,000. Outside that rule, such as a fixed-rate loan, the lender's own charge applies, and it must be stated in the sanction letter and the Key Facts Statement.

How is a foreclosure charge calculated?

On a term loan it is charged on the amount you prepay. At an assumed 4% charge, closing ₹10,00,000 costs ₹40,000, against ₹2,30,395 of interest saved, a net saving of ₹1,90,395.

When is prepaying not worth it?

When the charge is more than the interest saved, or when the money earns more in the business than the loan rate costs. Keep enough cash for working capital before you prepay.

Does this calculator affect my CIBIL score?

No. It makes no credit enquiry and asks for no name, phone number or PAN. CIBIL is the credit bureau whose score and report lenders check. Like every page on this site, it uses the analytics described in our Privacy Policy and Cookie policy.

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Sources

How to read these figures

Capnix is not a lender. Rates, amounts and approvals are decided by lenders. Rates shown here are examples, not offers.

Interest saved: the remaining schedule walked month by month before and after the prepayment, standard loan arithmetic.
Prepayment charges: RBI directions of 02-Jul-2025, in force from 01-Jan-2026.
The charge you pay: your sanction letter and Key Facts Statement.

Last checked: 02-Oct-2026.