Loan Payoff Calculator — Extra Payment Savings
Find out how much time and interest you save by making extra payments on any loan. Enter your balance, interest rate, and monthly payment to see your payoff timeline and total interest cost.
How to use it
- Enter your current loan balance.
- Enter the annual interest rate.
- Enter your regular monthly payment.
- Optionally enter an extra monthly payment amount.
- Compare payoff time and total interest with and without extra payments.
How Much Can Extra Payments Save?
On a $15,000 car loan at 6.5% with a $300 monthly payment, adding just $100/month extra saves approximately $800 in interest and pays off the loan 18 months sooner.
Best Strategy for Paying Off Loans Early
Avalanche Method: target highest-interest debt first (saves the most money). Snowball Method: target smallest balance first (provides psychological wins). Both work — the best method is the one you stick with.
The formula
Frequently asked questions
Does paying extra on a loan reduce interest?
Yes — extra payments reduce the principal faster, which reduces the amount of interest that accrues each month.
Is it better to make extra payments or invest?
Compare your loan interest rate to expected investment returns. If your loan rate is 7% and you expect 10% returns, investing may be better. If your rate is 20% (credit card), paying it off first is almost always better.
Can I make extra payments on any loan?
Most loans allow extra payments without penalty. Check your loan agreement for prepayment penalties.
What is the fastest way to pay off debt?
Pay more than the minimum every month. Even $50 extra per month can save years of payments on a large loan.