Legacy Investing CalculatorsShow

Early loan payoff

How much time and interest can an extra payment save?

Your numbers

$
%
yrs
$

Interest saved

$1,436

Time saved1 yr 6 mo
New payoff time3 yrs 6 mo
Scheduled payoff time5 yrs
Scheduled payment$348.55
Payment with extra$473.55

Tip. Extras early in the term cut far more interest than the same extras near the end.

Assumptions

  • Compares the scheduled amortization against the same payment plus the extra amount every month.
  • Every extra dollar reduces principal immediately, which is what makes the interest saving compound.
  • Assumes no prepayment penalty and a servicer that applies extras to principal rather than holding them as an advance payment.

Explore the numbers

Examples and charts

Start with a scenario, then read the response curve to see which input actually moves the answer.

Example 1

Small consistent extra

An amount most budgets can absorb, which still moves the payoff date.

Interest saved

$718

Example 2

Meaningful extra

Roughly a third on top of the scheduled payment.

Interest saved

$1,436

Example 3

Payoff push

Doubling the effective payment to clear the loan in about half the time.

Interest saved

$2,518

Sweeps extra monthly from half to one and a half times your value, holding everything else fixed.

Response curve

How extra monthly moves the result

Interest saved

$1,436

$800$1.0k$1.2k$1.4k$1.6k$1.8k$80.00$100$120$140$160$180
Chart axis: Extra monthlyNow $125 → $1.4k

Timeline

How much sooner the balance reaches zero
$0$5.0k$10k$15kStartM30Y5
  • Balance with extra payment
  • Balance on schedule

What this calculates

Shows the interest and time saved by adding a fixed extra amount to every payment on an amortizing loan. The two balance curves make the gap concrete.

How to use it

  1. Start with balance and work down the form, or load an example to begin from a realistic case.
  2. Read the headline result alongside the supporting rows, which show the intermediate figures behind it.
  3. Check the assumptions. They decide what the number includes and, more importantly, what it leaves out.
  4. Sweep extra monthly on the response curve to see how much it actually moves the answer.
  5. Run a cautious case as well as an optimistic one before using the estimate in a decision.

Common mistakes

  • Sending extra without instructing the lender to apply it to principal.
  • Paying extra on a low-rate loan while carrying card debt at 20%.
  • Emptying the emergency fund into a loan and then borrowing again at a worse rate.

Formula

Amortize with payment = scheduled payment + extra, until the balance clears

Inputs

  • Balance
  • APR (%)
  • Remaining term (yrs)
  • Extra monthly

FAQ

Should I invest instead of paying extra?

Compare the loan rate to what you expect to earn after tax, and account for the fact that paying the loan is certain and investing is not. This page only prices the payoff path.

Will the lender apply my extra to principal?

Not automatically. Many servicers hold extra payments as a prepaid next instalment unless you specify principal-only, which saves you nothing. Check after the first extra payment lands.

Is a lump sum better than a monthly extra?

A lump sum paid earlier saves more than the same total spread over years, because the interest you avoid depends on how long the principal was outstanding.

Are these numbers financial advice?

No. They are educational estimates based on the inputs and assumptions on this page. Confirm important decisions with a qualified professional and your own documents.

Read the full guideHow to pay off a loan early

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