માસિક vs વાર્ષિક પ્રીપેમેન્ટ: કોણ વધુ બચાવે?

For a ₹50L loan at 8.5% for 20 years, with a total annual prepayment budget of ₹60,000:

The reason is simple: money that reduces principal today stops accruing interest from today. If you prepay ₹5,000 in January, February, March… each payment reduces the principal base on which interest is calculated for the rest of the year.

With a yearly lump sum, the ₹60,000 sits idle (earning at most savings account rates) for up to 11 months before being applied. During those months, interest continues accruing on the full outstanding balance.

The difference is not dramatic at ₹0.9L, but it is free money. If monthly prepayments are equally convenient, they are the better option.

• Your lender charges a fee per prepayment transaction, making 12 monthly charges more expensive than one annual fee
• Your cash flow is irregular, with a salary + annual bonus structure that makes lump sum prepayment more practical
• Your lender has a minimum prepayment threshold that makes small monthly amounts ineligible
• You prefer simplicity: one annual decision rather than monthly tracking

If your lender allows free, unlimited part-prepayments (common for floating-rate loans under current RBI rules), monthly prepayments are marginally better and require no extra effort once set up.

If lump sum annual prepayment is more practical for your income pattern, such as when funded by a yearly bonus, the difference is small. ₹13.0L saved vs ₹13.9L saved is still an excellent outcome for either approach.

See bank-specific prepayment worked examples: HDFC, SBI, ICICI, or view all 12 banks.

The examples above use a typical ₹50L loan. Upload your statement to see the monthly vs yearly comparison for your exact balance and rate.