Personal finance · free calculator
Loan early payoff savings calculator
See how an extra monthly principal payment shortens a fixed-rate loan and exactly how much interest it saves.
Interest saved
9 months faster payoff
Show the work
- Scheduled payment$304.22
- Payment with extra$404.22
- Baseline payoff36 mo
- Accelerated payoff27 mo
- Baseline interest$951.90
- Accelerated interest$701.65
Extra principal works because interest is balance-driven
Amortizing loans charge interest on the remaining balance, not on the original amount forever. That means every extra principal payment does two things:
- It lowers next month's interest charge.
- It lets more of every later payment go to principal instead of interest.
The payment formula underneath
For a fixed-rate loan, the required monthly payment is:
- Payment = P × r ÷ (1 - (1 + r)^-n)
Where:
- P = current principal
- r = monthly interest rate
- n = remaining months
This calculator uses that payment, then simulates the balance month by month with and without your extra payment. That produces exact months saved and exact interest saved, including a smaller final payment in the payoff month.
When early payoff is strongest
- High APR loans
- Long remaining terms
- Extra payments started early
The leverage is weaker when the balance is already small or the payoff date is close, because there are fewer future interest periods left to avoid.
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