Part of the Finance collection — 4 tools available
Loan Early Payoff Calculator
Calculate how much you save by paying extra on your loan each month. See interest savings and how many months early you will be debt-free.
About This Calculator
Adding even a small extra payment to your loan each month can save thousands in interest and cut years off your repayment timeline — often far more than people expect. On a $25,000 personal loan at 6% interest over 5 years, adding just $200 per month in extra payments saves over $3,000 in interest and gets you debt-free nearly 2 years early. The earlier you start making extra payments, the bigger the impact because more of each payment goes toward principal rather than interest. Our loan early payoff calculator shows exactly how much you save.
The Formula Behind This Calculator
Months = -log(1 - P*r / Payment) / log(1+r) Extra payments dramatically shorten term Biweekly = 13 monthly payments/year.
Understanding the math helps you verify results and make better decisions for your project.
Related Tools
How to Use
- 1Enter your current loan balance.
- 2Set the interest rate on the loan.
- 3Enter your current monthly payment.
- 4Add the extra amount you can pay each month.
When to Use
- →Deciding whether to make extra payments on a loan or invest the money instead.
- →Seeing how a raise or side income can accelerate debt payoff.
- →Comparing strategies between paying extra vs refinancing.
Tips
- ✓Specify that extra payments go to principal, not prepaying next month's interest.
- ✓Even $50-100 extra per month on a 30-year mortgage can cut 5+ years off the term.
- ✓Pay off highest-interest debt first (avalanche method) for maximum interest savings.
FAQ
Should I pay off my loan early or invest the extra money?
If your loan interest rate is higher than your expected investment return, pay the loan. If investment return is significantly higher, invest. For rates around 5-6%, it depends on your risk tolerance and tax situation.
Do extra payments go to principal automatically?
Not always. Some lenders apply extra payments to the next month's bill. You may need to specify that the extra amount should go directly to principal reduction.
Is there a prepayment penalty?
Most modern loans do not have prepayment penalties, but some mortgages and auto loans still do. Check your loan agreement before making large extra payments.
Related Calculators
Compound Interest Calculator — Calculate Your Investment Growth
Calculate compound interest growth over time. See how your investment grows with different rates, compounding frequencies, and regular contributions.
Mortgage Calculator — Monthly Payment & Amortization
Calculate your monthly mortgage payment with taxes and insurance. See total interest cost and amortization for any home loan amount, rate, and term.
ROI Calculator — Return on Investment
Calculate return on investment as a percentage and dollar amount. Enter investment cost and return to see ROI, annualized return, and profit or loss.