Loan vs Investment Calculator
Should you pay extra toward the loan or invest the monthly surplus instead? Compare the interest you would save by prepaying with the growth your investments could earn — and see the clear winner.
How to use
- Enter your remaining loan balance, the annual interest rate, and how many months are left on the loan.
- Enter the monthly surplus you can spare, and the annual return you expect from an investment.
- Compare the interest saved by prepaying with the growth from investing — the verdict box shows which option wins and by how much.
- Try different investment return values to see how the winner changes under optimistic and cautious scenarios.
Note
Investment returns are not guaranteed, and past performance does not promise future results. Also check whether your bank charges a prepayment penalty before making extra loan payments.
Frequently Asked Questions (FAQ)
What does the loan vs investment calculator compare?
It compares two uses of your monthly surplus: Option A pays the surplus toward the loan to cut interest and finish sooner, while Option B invests the surplus for the remaining loan term. Both results are shown side by side.
What inputs do I enter in the calculator?
Remaining loan balance, annual loan interest rate, remaining loan term in months, monthly surplus amount, and the expected annual investment return.
How does the calculator decide the winner?
It compares the interest saved by prepaying the loan with the investment growth from investing the surplus. The larger figure wins, and the verdict box shows the exact difference in rupees.
How is the investment value calculated?
Your monthly surplus is grown for the full remaining loan term at your expected annual return, compounded monthly, using the standard future value of a monthly series.
Why does the investment side run only for the remaining loan term?
After the loan ends, the freed-up payment is available on both sides, so the only period where the choice matters is the remaining loan term. Keeping the same window makes the comparison fair.