1. What is Prepayment Impact?

The prepayment impact calculator estimates how making an extra payment affects your ICICI Bank loan. You can choose to either reduce your EMI amount or shorten your loan tenure.

2. How Does the Calculator Work?

The calculator uses standard EMI formula after accounting for prepayment:

Where:

• \( P \) — Principal amount after prepayment
• \( r \) — Monthly interest rate (annual rate/12)
• \( n \) — Remaining tenure in months

Explanation: When you prepay, the calculator adjusts either the EMI or tenure based on the reduced principal amount.

3. Importance of Prepayment Calculation

Details: Understanding prepayment impact helps borrowers make informed decisions about managing their loans and saving on interest payments.

4. Using the Calculator

Tips: Enter your remaining principal, interest rate, remaining tenure, prepayment amount, and choose whether to reduce EMI or tenure. All values must be valid positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Does ICICI Bank charge prepayment penalty?
A: For floating rate loans, ICICI doesn't charge prepayment penalty. Fixed rate loans may have charges - check with your bank.

Q2: Which is better - reducing EMI or tenure?
A: Reducing tenure saves more interest overall, while reducing EMI improves monthly cash flow.

Q3: How often can I make prepayments?
A: ICICI typically allows multiple prepayments, but check your loan terms for any restrictions.

Q4: Are there tax benefits on prepayment?
A: No, prepayment doesn't qualify for tax benefits under Section 80C like regular EMI principal does.

Q5: Can I reverse my prepayment option choice?
A: Once you choose between reducing EMI or tenure, the change is typically permanent for that prepayment.