A worked example: ₹2L outstanding, 14%, 3 years, ₹2,000 extra/month
A ₹2,00,000 loan at 14% with 36 months remaining has an EMI of ₹6,835.53. Adding ₹2,000 extra to every payment pays it off in 27 months instead of 36 — 9 months sooner — saving ₹12,485.46 in interest.
Why this needs a simulation, not a formula
Unlike the original EMI amount (which has a closed-form formula), the effect of an extra payment on total interest depends on exactly how the balance shrinks month by month — so the calculator walks through the loan one month at a time, applying the extra amount to principal each time, until the balance reaches zero.
A bigger extra payment: ₹5,000/month instead of ₹2,000
The same loan with ₹5,000 extra each month pays off in just 19 months — 17 months sooner — saving ₹22,016.32 in interest, nearly double the savings from the smaller extra payment. The relationship isn't linear: a larger extra payment saves disproportionately more, since it also front-loads more principal reduction into the loan's expensive early months.
Why extra payments save more early in a loan's life
The earlier an extra rupee reduces principal, the more months of interest it avoids — an extra payment made in month 1 saves interest on that amount for the entire remaining tenure, while the same extra payment made near the end of the loan barely avoids any interest at all.
What to confirm with your lender first
This assumes every rupee of the extra payment reduces principal immediately — some lenders apply extra payments to future EMIs instead of the principal balance, which produces a very different (much smaller) savings outcome. Confirming how a specific lender applies prepayments is worth doing before counting on these numbers.