Prepay your loan or invest?
Enter your loan, the lump sum you have and a return you expect. See which leaves you with more by the time the loan would have ended.
- Fair, same-date comparison
- Your own return assumption
- Free, no sign-up
Tax can change the answer
Home loan interest may cut your tax, and investment gains are taxed. Both shift the result.
Questions people often ask
How does section 24 affect this?
In the old regime, interest up to ₹2 lakh a year on a home you live in cuts your tax, which lowers the loan's real cost and favours investing.
And in the new regime?
Interest on a self-occupied home doesn't cut tax, so prepaying looks better than in the old regime.
A fair comparison
Both paths end on the same date.
- Prepay: the loan ends early; the freed EMI is invested.
- Invest: the lump sum grows until the original end.
- Compare what you'd have on that date, before tax.
Last reviewed 9 October 2026. The rules in this calculator come from these official sources.
Common questions
How does this compare the two fairly?
Both paths end on the loan's original end date. If you prepay, the loan ends early and the EMI you no longer pay is invested each month. If you invest, the lump sum grows until that date.
When does prepaying win?
When your investments earn less than your loan rate. Prepaying is a guaranteed return equal to the loan rate.
When does investing win?
When your investments earn more than the loan rate over the period, before tax. The higher the gap, the bigger the win.
What if the return equals the loan rate?
Before tax, the two come out the same.
Should I keep an emergency fund first?
Yes. Money used to prepay is hard to get back; keep several months of expenses aside first.
Does tax change the answer?
Often. Home loan deductions lower the loan's real cost, and investment gains are taxed. This calculator is before tax.
