Work out what it actually costs to close your personal, home, car, or bike loan early in India, how much interest you avoid, and whether foreclosing beats continuing your EMIs.
Loan foreclosure, also called preclosure, means paying off your entire outstanding loan balance before its scheduled end date instead of finishing the remaining EMIs one by one. It is different from a normal EMI payment, which only covers that month's interest and a slice of the principal. It is also different from refinancing, where you take a new loan from another lender to pay off the old one; foreclosure just closes the account using your own funds.
The two numbers that decide whether foreclosure makes sense are the interest you still owe if you keep paying, and the foreclosure charge plus GST the lender asks for in exchange for closing early. The calculator below works out both.
The math is standard loan amortization. Nothing here is lender-specific until you enter a charge percentage yourself.
Remaining interest
EMI × remaining months − outstanding principal
Foreclosure charge
% of outstanding principal, or a flat fee
GST on charge
Foreclosure charge × GST rate (typically 18%)
Net benefit
Interest avoided − (charge + GST + other fees)
Enter your loan details, then choose whether you want to close the loan entirely or make a partial prepayment. Leave charge fields at 0 if you don't know your lender's fee; don't guess a number you haven't confirmed.
Loan Details
What you still owe today, not the original loan amount
If left blank, EMI is calculated from principal, rate, and tenure
Foreclosure Charges
Estimate only. Confirm the exact figure with your lender's foreclosure statement.
Your result will appear here
Fill in your loan details on the left and calculate.
Personal loans are almost always unsecured and carry higher interest rates than home or car loans, so foreclosing one usually saves more interest per rupee of outstanding principal. Personal loan foreclosure charges generally sit between 2% and 5% of the outstanding principal, plus GST, and lenders often apply a minimum lock-in period, commonly around 12 months, before allowing foreclosure at all. The RBI's floating-rate exemption mostly does not apply to personal loans for non-business use in the same way it does to home loans, since personal loan rates are frequently fixed. Check your loan agreement rather than assuming the exemption applies.
Home loans usually run the longest tenures of any retail loan in India, which means the largest share of your early EMIs goes toward interest rather than principal. That makes the interest-avoided side of the calculation especially large in the first third of the loan term. If your home loan is on a floating rate and was taken for a non-business purpose, RBI rules already bar lenders from charging you a foreclosure fee, and that protection was extended from January 1, 2026 to floating-rate loans for individuals and Micro & Small Enterprises taken for business purposes as well, for loans sanctioned or renewed on or after that date. Fixed-rate home loans can still carry a disclosed charge.
Car loans depreciate against the value of an asset that is losing value at the same time, so many borrowers foreclose once they have surplus cash rather than carry the loan to term. Foreclosure charges on car loans typically run from 2% to 6% of the outstanding principal depending on the lender and how much of the tenure remains, and GST applies on top. Some lenders reduce or waive the charge once you are more than halfway through the loan term; check your agreement for this detail specifically.
Two-wheeler loans are short-tenure, high-rate loans, so the remaining interest can still be significant even a year or two into the loan. Preclosure charges on bike loans are often flat percentages, commonly 3% to 6% of the outstanding principal, and some lenders do not allow preclosure within the first six months. Enter your lender's exact figure once you have it rather than relying on a typical range.
Lenders in India structure foreclosure and prepayment charges in one of two ways: a percentage of the outstanding principal or prepaid amount, or a flat fee. GST at 18% is added on top of whichever charge applies, since it is a taxable financial service. Some lenders also add administrative or documentation fees separate from the foreclosure charge itself.
There is no single percentage that applies across Indian lenders, loan types, and interest rate structures, so don't treat any figure in this article as your own charge. Since January 1, 2026, RBI directions prohibit foreclosure and prepayment charges on floating-rate loans taken by individuals for non-business purposes, and extend that prohibition to floating-rate loans for individuals and Micro & Small Enterprises for business purposes, for loans sanctioned or renewed on or after that date, subject to conditions tied to lender category and loan size. Fixed-rate loans, foreign currency loans, and loans outside these categories can still carry a charge, provided the lender discloses it upfront in the sanction letter, loan agreement, and Key Facts Statement.
To find your own charge, check your loan agreement or sanction letter, or request a foreclosure statement from your lender. That statement will also show any accrued interest since your last EMI, which this calculator does not add automatically.
Foreclosure may make sense when:
Continuing the loan may make more sense when:
This is a general framework, not personalized financial advice. Your own tax situation, other debts, and financial goals can change the right answer.
Once you have decided to foreclose, work through this before sending the payment.
Formula used: EMI = P × r × (1+r)ⁿ ÷ ((1+r)ⁿ − 1), where P is outstanding principal, r is the monthly interest rate, and n is remaining tenure in months. Remaining interest = (EMI × n) − P. Foreclosure or prepayment charge, GST, and other fees come directly from what you enter.
User-entered figures: Loan type, outstanding principal, interest rate, tenure, EMI, and any charges are all supplied by you and not verified against your lender.
Regulatory information: Statements about RBI rules on floating-rate loan prepayment charges reflect RBI directions effective January 1, 2026, and the earlier 2012 and 2014 circulars covering individual floating-rate borrowers. Source: RBI ↗
Information verified: August 2026. Lender charges and RBI thresholds change; verify current figures with your lender or the RBI website before relying on them.
Disclaimer
This calculator provides an estimate based on the information you enter. Confirm the final foreclosure amount with your lender, since their statement may include accrued interest, taxes, or other charges this tool does not account for. This is not financial advice.
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Run your numbers first, then confirm the final figure with your lender.
Methodology & Attribution
Authored by: InvoiceFollowUps.com Finance Research Team
Calculation method: Standard reducing-balance loan amortization. EMI = P × r × (1+r)ⁿ ÷ ((1+r)ⁿ − 1). Remaining interest = (EMI × n) − P.
Last updated: August 31, 2026
Sources: RBI.org.in ↗. Bank-specific charges are not published here; verify directly with your lender.