Loans
Loan prepayment strategies
Tenure cut vs EMI cut, lump-sum timing, and questions to ask before prepaying.
6 min read · Updated August 2026
Two common choices after a prepayment
Lenders may let you reduce tenure (keep EMI) or reduce EMI (keep tenure). Tenure reduction usually saves more interest; EMI reduction improves monthly cash flow.
Before you prepay
- Keep emergency cash—don’t prepay the last rupee
- Check fees and lock-in clauses in your loan agreement
- Compare loan rate with expected post-tax investment returns
- Model the exact month of the lump sum—timing changes savings
Related calculators
Keep reading
Educational content from Aaru Wealth. Not investment, tax or legal advice.