Payoff Date (with extra): When your loan balance reaches zero if you add the extra payment every month. Earlier is better — it means less total interest.
Payoff Date (without extra): Your original payoff timeline making only the minimum payment.
Time Saved: The number of months you cut from the loan by paying extra. Even a modest extra payment can shave years off a long-term loan.
Interest Saved: The total interest dollars you avoid by paying off the principal faster. On a large balance, this can be thousands or tens of thousands of dollars.
Total Amount Paid: The sum of all payments made until payoff with the extra payment included. Compare this to the original balance to see total cost of borrowing.
How This Calculator Works
You enter your current loan balance, annual interest rate, scheduled monthly payment, and an optional extra monthly payment. The tool computes payoff timelines for both scenarios using the standard amortization payoff formula. It then compares total interest paid in each case to show you exactly how much time and money the extra payment saves.
Quick Questions
Does every extra dollar go to principal?
On most standard amortizing loans, yes — extra payments reduce the principal balance directly, which means you pay less interest in future months. However, some lenders may apply extra payments to future scheduled payments instead. Confirm with your lender that extra payments are applied to principal.
Is there a prepayment penalty?
Some loans, especially older mortgages and certain auto loans, charge a fee for paying off early. Check your loan agreement for a prepayment penalty clause before committing to extra payments. Federal student loans and most modern mortgages do not have prepayment penalties.
Should I pay extra on my loan or invest instead?
It depends on the interest rate. If your loan rate is higher than what you'd reasonably earn investing (after taxes), paying extra on the loan is generally a guaranteed return. If your loan rate is low, investing may yield more over time, but it carries market risk. Many people do a mix of both.
Does this work for variable-rate loans?
This calculator assumes a fixed rate. If your rate is variable, the results are approximate — your actual payoff date and interest will change as the rate adjusts. Re-run the calculation periodically with your current rate for a more accurate picture.
Estimate only. Results reflect your inputs and standard formulas — they are not financial, tax, legal, health, or investment advice. Verify important decisions with a qualified professional.