Prepay vs Invest

Prepay vs Invest \u00b7 decision engine

Got a monthly surplus? See whether killing the loan or investing builds more wealth.

Outstanding loan₹

Loan interest (p.a.) %

Tenure left yrs

Monthly surplus₹

Expected investment return (p.a.) %

Apply ~12.5% LTCG tax on investment gains

\u2014

Prepay first, then invest

₹0

Invest from day one

₹0

Loan cleared in (prepay path)\u2014

Interest saved by prepaying\u2014

Effective post-tax loan cost*\u2014

Both paths are compared over the same horizon (your current tenure). Prepay first: the surplus reduces the loan; once it's clear, the freed-up EMI plus the surplus are invested for the years that remain. Invest from day one: the loan runs its full course while the surplus is invested throughout. The math is only half the story \u2014 prepaying is a guaranteed, risk-free saving and debt-free peace of mind; investing carries market risk but stays liquid. *Effective loan cost assumes you claim Sec 24(b) interest benefit in the 30% slab. Indicative only, not financial advice.