Loan Payoff Calculator
See exactly how much time and interest an extra monthly payment can save you on an existing loan.
How extra payments shorten a loan
When you pay extra toward an installment loan, that entire extra amount reduces your principal balance immediately — it's not split with interest the way your regular payment is. A smaller balance means less interest accrues every month going forward, which compounds over the life of the loan into meaningfully fewer total payments and less interest paid overall. This calculator compares your loan's original payoff schedule against one with your chosen extra monthly payment applied every month.
The math behind it
Both schedules use the same amortization logic — interest due = balance × (APR ÷ 12), principal paid = payment − interest, new balance = old balance − principal — but the "with extra payment" version adds your extra amount to principal every single month, which is why the balance reaches zero sooner.
Is paying extra always the right move?
It depends on your interest rate and other goals. If your loan's rate is higher than what you could reliably earn investing that money elsewhere (after tax), paying extra usually makes sense. If you have higher-interest debt elsewhere (like credit cards), or no emergency fund yet, those typically deserve the extra dollars first.
Frequently asked questions
Does the extra payment need to be the same every month?
This calculator assumes a consistent extra amount each month for simplicity. In practice, even irregular extra payments (a tax refund, a bonus) reduce your balance and future interest the same way — just less predictably.
Will my lender apply extra payments to principal automatically?
Not always — some loan servicers apply extra amounts to future scheduled payments instead of directly to principal unless you specify otherwise. Check with your lender or loan servicing portal and mark extra payments as "principal only" if that option exists.
Is there a penalty for paying off a loan early?
Some loans, especially certain personal loans and older mortgages, include prepayment penalties. Check your loan agreement before making large extra payments.
What if I want to pay off the loan by a specific date?
Try increasing the extra payment amount above until the "new payoff" time matches your target date — that tells you roughly how much extra you'd need to pay each month.