Loan Refinance Calculator

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🔄 Refinance Offer

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💡 Include: Processing fee + GST, legal fees, valuation, foreclosure charges (if any)

Refinance Analysis

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Adjust the inputs to see if refinancing makes sense for you

Quick Jump:📖 What is Refinancing🔍 10 Hidden Truths✅ When to Refinance❓ FAQs

🏦 Loan Refinance Calculator – Should You Refinance Your Loan in India?

Refinancing a loan can reduce your EMI, shorten your loan tenure, or save lakhs in interest — but only if done right. Many borrowers refinance based on EMI reduction alone and later realise they paid more interest overall.

Our Loan Refinance Calculator (India) helps you compare your existing loan vs a new refinance offer and clearly answers one question:

Is refinancing actually worth it for you — or not?

👉 Use the calculator above to see EMI changes, total interest saved, break-even time, and long-term impact.

📖 What Is Loan Refinancing?

Loan refinancing means closing your existing loan by taking a new loan at a lower interest rate or better terms. The new lender pays off your old loan, and you continue repayment under new conditions.

Refinancing is commonly used for:

  • Home loans
  • Personal loans
  • Education loans
  • Balance transfers

⚠️ Important: A lower interest rate alone does not guarantee savings. You must consider tenure reset, break-even period, and hidden costs.

🔍 10 Things Banks Don't Tell You About Loan Refinancing

Banks and comparison sites usually highlight lower EMI, but often skip important details like tenure reset, break-even period, and hidden costs. Here's what borrowers are rarely told:

1. Lower EMI Often Means Longer Tenure

Reducing EMI usually happens by extending the loan tenure. This can increase total interest, even at a lower rate.

📌 Always compare remaining tenure vs new tenure.

2. Refinancing Has a Break-Even Period

Refinancing involves upfront costs: processing fees, GST, legal & valuation charges. Your savings start only after these costs are recovered.

⏱ If you plan to prepay or close the loan before break-even, refinancing may lose money.

3. Processing Fee Is Not the Real Cost

A "0.25% processing fee" sounds small, but GST (18%) applies, legal & admin charges add up, and costs are paid today while savings come slowly.

💡 Time value of money matters.

4. Tenure Reset Can Destroy Wealth

A refinance can reset your loan to 20–25 years, even if only 10–12 years were left. Lower EMI feels good monthly, but long tenure silently increases interest by lakhs.

5. Floating Rate Spread Often Resets

When you refinance, your benchmark linkage changes. Old beneficial spreads may be lost, and future rate hikes can impact you more.

📉 Today's low rate may not stay low.

6. Cash-Out Refinance Is Not Free Money

Taking extra cash during refinance means you pay interest on that amount for 15–25 years. Often used for consumption, not assets.

💸 ₹5L cash-out can cost ₹8–10L over time.

7. Prepayment May Be Better Than Refinance

Instead of refinancing, a one-time prepayment could reduce tenure faster, save more interest, and avoid processing fees.

⚖ Always compare Refinance vs Prepayment.

8. Insurance & Add-Ons Are Quietly Added

New loans often include fresh loan insurance, bundled products, and new bank account requirements. Always ask what is mandatory vs optional.

9. EMI Comfort Can Delay Debt Freedom

Lower EMI creates comfort, but many borrowers never increase EMI later — staying in debt longer than needed.

📈 Keeping EMI same after refinance can shorten tenure drastically.

10. Tax Benefit Should Not Drive Refinance

Paying more interest just to save tax rarely makes sense. Section 24 benefits are capped, and excess interest gives no tax advantage.

🧮 Always look at post-tax effective cost.

🧮 How Our Refinance Calculator Helps You Decide Correctly

Unlike basic calculators, our tool shows the complete picture:

✅ Current loan vs refinance comparison
✅ EMI change and tenure change
✅ Total interest saved (or added)
✅ Break-even month calculation
✅ Real refinance cost impact
✅ Clear verdict: Worth it / Maybe / Not worth it

👉 Try different scenarios: Reduce EMI, shorten tenure, or compare with prepayment.

✅ When Refinancing Usually Makes Sense

✅ Refinancing May Be Beneficial If:

  • •Interest rate difference ≥ 0.75%–1%
  • •Break-even period < 3 years
  • •You plan to stay in the loan long term
  • •Tenure does not increase significantly
  • •You avoid unnecessary cash-out

❌ Avoid Refinancing If:

  • •You plan to prepay soon
  • •Tenure increases sharply
  • •Savings depend only on EMI reduction
  • •Upfront costs are high
  • •New loan resets favourable rate spread

❓ Frequently Asked Questions

Is refinancing always good when interest rates fall?▼

No. Savings depend on tenure, costs, and how long you stay in the loan. A lower rate with longer tenure can actually cost you more in total interest.

You must calculate the break-even period and ensure you'll stay in the loan long enough to recover refinancing costs.

How much rate reduction is worth refinancing?▼

Usually 0.75% or more, but only after checking break-even. For example, refinancing from 9% to 8.25% on a ₹50L loan could save ₹3-4L in interest over 15 years, but you need to recover processing fees first.

Rule of thumb: If break-even is under 24 months and you have 7+ years remaining, refinancing is usually worth it.

Is refinancing better than prepayment?▼

Not always. Prepayment often saves more interest with zero fees, especially if you have a lump sum available.

  • Prepayment is better when you have extra funds and want to reduce principal directly
  • Refinancing is better when you don't have lump sum but want lower EMI or rate

Ideal strategy: Refinance first, then use the EMI savings to prepay regularly.

Does refinancing affect credit score?▼

Temporarily, yes. Your score may dip slightly due to:

  • Hard inquiry from new lender (5-10 points)
  • Closing of old loan account
  • New loan account appearing on report

However, the score usually recovers within 3-6 months if you make timely payments on the new loan.

What are typical refinancing costs in India?▼

Typical costs breakdown:

  • Processing fee: 0.25-1% of loan amount + 18% GST
  • Legal & documentation: ₹5,000 - ₹15,000
  • Property valuation: ₹2,000 - ₹10,000
  • Foreclosure charges: 0-2% of outstanding (floating rate loans have zero charges since Jan 2023)
  • Stamp duty (if applicable): Varies by state

Example: For a ₹50L refinance, expect ₹25,000 - ₹75,000 in total costs.

How long does the refinancing process take?▼

Typical timeline:

  • Application & document submission: 1-2 days
  • Credit assessment: 3-7 days
  • Property valuation: 2-5 days
  • Legal verification: 5-10 days
  • Sanction & disbursement: 2-5 days

Total: 2-4 weeks for most cases. Can be faster (7-10 days) with digital-first lenders.

💡 Final Thought: Refinance With Clarity, Not Just EMI

Refinancing is a financial restructuring decision, not just an EMI adjustment. Use our Loan Refinance Calculator to see the complete picture — EMI, tenure, interest, break-even, and long-term impact — before switching loans.

👉Calculate before you refinance.