Loan Payoff Calculator (Extra Payments)
Enter your loan balance, rate, and payment, then try an extra monthly amount. The calculator shows your new payoff date and the exact interest you save.
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Why extra payments are so powerful
Every extra dollar goes straight to principal. A smaller principal accrues less interest next month, which means more of your regular payment also hits principal — the effect compounds in your favor for the whole life of the loan.
Worked example
A $20,000 loan at 7.5% APR with a $400 monthly payment takes about 4 years 9 months and costs roughly $3,700 in interest. Add just $100/month and it's paid off in about 3 years 10 months with around $2,900 of interest — saving close to $800 and 11 months.
Before you prepay, check two things
- Prepayment penalties: rare on US mortgages and most personal loans, but check your agreement.
- Payment application: tell your lender the extra must go to principal. Some apply it to the next payment instead, which saves you nothing.
Extra payments vs investing
Prepaying a loan is a guaranteed, tax-free return equal to your interest rate. Paying off a 7.5% loan beats most guaranteed alternatives; paying extra on a 3% mortgage while high-yield savings pay more may not. Compare rates before choosing.
Frequently asked questions
How much faster will I pay off my loan with an extra $100 a month?
It depends on balance and rate. On a $20,000 loan at 7.5% with a $400 payment, an extra $100/month pays it off about 11 months sooner and saves roughly $800 in interest. Enter your own numbers above for exact figures.
Is it better to pay extra monthly or one lump sum?
Earlier money saves more interest, so a lump sum today beats the same total spread over the year. Any extra principal helps either way.
Do extra payments lower my monthly payment?
Usually no — they shorten the loan instead. Your required payment stays the same but ends sooner. Some lenders can "recast" a mortgage after a large lump sum to lower payments.
Should I pay off my loan early or invest?
Prepaying earns you a guaranteed return equal to the interest rate of the loan. High-rate debt (above ~7%) is usually worth prepaying; for low-rate debt, investing or high-yield savings may earn more. Consider your risk tolerance.
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Last updated: 2026-07-07