Part prepayment vs full prepayment which saves more?

Short answer
Full prepayment saves more interest. Part prepayment gives flexibility. The better option depends on your cash flow.

What is Part Prepayment

Part prepayment means you pay an extra amount towards your loan while continuing regular EMIs. This extra amount directly reduces the principal. Banks either reduce your tenure or your EMI after part prepayment. Monthly pressure kam hota hai and interest burden bhi dheere dheere reduce hota hai.

This option works well if you get bonuses, incentives, or occasional surplus cash. Aap control mein rehte ho and emergency fund bhi intact reh sakta hai.

What is Full Prepayment

Full prepayment means closing the entire loan before tenure ends. Once you pay the remaining principal, the loan is fully closed and interest stops completely. This results in maximum interest savings.

But full prepayment needs a large lump sum. Agar saari savings loan mein laga di aur emergency aa gayi, toh problem ho sakti hai.

Which One Saves More Money

Pure numbers mein dekha jaaye, full prepayment saves the most interest because future interest is eliminated. Part prepayment also saves interest, but only on the reduced principal and over time.

However, savings should not come at the cost of financial safety. Thoda balance zaroori hota hai.

Things to Check Before Deciding

Check if your loan has prepayment charges, especially for fixed-rate loans. Floating-rate home loans usually have no penalty. Also confirm whether part prepayment reduces tenure or EMI. Tenure reduction saves more interest.

Final Takeaway

Full prepayment saves maximum interest if you have surplus money and emergency backup. Part prepayment is better if cash flow is uneven. Paisa save karna important hai, but liquidity sacrifice mat karo. Smart choice woh hoti hai jo stress kam rakhe, sirf interest nahi.