Save money3 min read · Updated 17 October 2026
One extra EMI a year: how much a 13th EMI saves on a home loan
Paying one extra EMI every year on a ₹50 lakh home loan ends it years sooner and saves lakhs of interest. The numbers, a step-up EMI comparison and how to do it.
The idea
An EMI is split between interest and principal. Every rupee you pay on top goes fully to principal, so the balance falls faster and later interest shrinks. A "13th EMI" means paying one extra EMI each year, for example from your bonus.
The numbers on ₹50 lakh at 8.5% over 20 years
| Plan | Ends in | Total interest | Interest saved |
|---|---|---|---|
| EMI of ₹43,391, nothing extra | 20 years | ₹54,13,879 | - |
| One extra EMI a year | 16 years 9 months | ₹43,84,740 | ₹10,29,139 |
| Two extra EMIs a year | 14 years 4 months | ₹36,67,852 | ₹17,46,027 |
| EMI up 5% each year | 12 years 3 months | ₹34,62,167 | ₹19,51,712 |
| EMI up 10% each year | 9 years 8 months | ₹27,91,049 | ₹26,22,829 |
The step-up rows assume your EMI rises by that share every year. They suit someone whose income grows. Test your own plan in Pay off sooner.
Why early prepayment works best
In the first month of this loan, about ₹35,417 of the first EMI is interest. Principal overtakes interest only after about 11.9 years. Money prepaid in the early years removes the most future interest.
How to do it
- Ask your lender to apply part-payments to reduce the tenure and keep the EMI the same. In writing.
- Pay the extra amount through the lender's part-payment option, not as a normal EMI.
- Ask for an updated repayment schedule and check the new end date.
- Keep an emergency fund before you prepay. See prepay or invest.
Common questions
How much does one extra EMI a year save?
On a ₹50 lakh, 20-year loan at 8.5%, about ₹10,29,139 of interest and 3 years 3 months off the term.
Is there a penalty for prepaying a home loan?
Not on floating-rate loans to individuals for non-business purposes. Fixed-rate loans may charge a fee set in the agreement.
Is a step-up EMI better than an extra EMI?
Both work. A step-up spreads the effort across the year and rises with income. An extra EMI is simpler if you get a yearly bonus.