Loan Foreclosure Calculator

What is Loan Foreclosure?

Loan foreclosure means paying off your entire remaining loan balance before the scheduled end date. Banks may charge a prepayment penalty (typically 2-4% for fixed-rate loans). RBI has mandated zero prepayment penalty on floating-rate home loans and personal loans.

When Should You Foreclose?

Foreclosure makes the most sense early in your loan tenure when a larger portion of your EMI goes toward interest. In the later stages, most of your EMI already goes toward principal, making foreclosure less impactful. Always compare the interest saved against the prepayment penalty and the potential returns you could earn by investing that money instead.

Key Things to Check

Before foreclosing, verify your loan type (fixed vs floating rate), check if your lender charges a prepayment penalty, confirm the exact outstanding balance including any accrued interest, and get a foreclosure statement from your bank. For home loans, also consider the tax benefit under Section 24(b) that you'll lose after foreclosure.