Loan prepayment and foreclosure

What it is

Loan prepayment in Lipi means recording extra principal you paid on a bank loan, or closing the loan early. Lipi works out the new schedule, shows how many EMIs you save or how much smaller the EMI becomes, and keeps the prepayment as a row in your schedule. The same tool covers early closure, also called foreclosure.

What problem it solves

Paying extra feels good, but it is hard to know what it did. Lipi shows the interest saved and the new end date. If your bank lets you pick between a shorter loan and a lower EMI, you can compare both before you decide.

How it works

1. Open the loan in Loans & EMI and open the loan’s More actions sheet and choose Prepay principal.
2. Enter the Amount and the Date. Under After this, choose Fewer EMIs (shorter tenure) or Smaller EMI.
3. If the bank charged a penalty, fill Penalty % or edit the Penalty amount.
4. Read the preview: under What changes, the New EMI and the old one, the Last EMI date, how many EMIs fewer, and Interest saved.
5. Choose where to rework from when the date is before EMIs you already paid: from the payment date, or only the EMIs still to pay. Optionally book the prepayment as an expense. Tap Record prepayment.
6. The prepayment appears in the schedule with a scissors icon and “Fewer EMIs”, and the unpaid rows are re-estimated.
7. To close the loan early, use Close early, then type the Final amount paid. Remaining EMIs are marked closed early.

Details and rules

• Prepayments and early closure are part of bank loans, which are Premium.
• Modes: reduce tenure or reduce EMI. The penalty is optional.
• You can edit a prepayment later. A transaction already booked does not change when you edit it.
• Later Calculate the rest runs keep every prepayment where it landed. Removing a prepayment reworks the unpaid EMIs without it.
• The loan insights dashboard widget shows interest saved and EMIs cut. It is Premium.
• Your bank’s letter may show different figures from the estimate. Edit the rows to match, see EMI schedule.
• The free loan calculator lets you test prepayments without saving.

Works with

• Bank loans
• EMI schedule
• Loan calculator
• Loan dashboard widgets

Ask an AI assistant

Ask an assistant connected to Lipi: “I prepaid Rs 3,00,000 on my home loan on 20 October.” It records it with save_bank_loan_event. That tool does not recalculate the schedule, so the assistant should then write the new rows from your bank’s letter with set_bank_loan_rows. To undo, it uses delete_bank_loan_event. It can read the result with get_bank_loan. These tools need Premium.