Loan Payoff Calculator (Extra Payments)
Enter your balance, rate, and current payment, then add an extra monthly amount. You'll see how much sooner the loan ends, the interest you save, and your new payoff date.
What you owe today, from your latest statement
The annual rate on the loan
What you pay now, before any extra
Additional principal on top of the payment
Debt-free in
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Enter a balance and payment
Interest saved
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Payoff date moved up by
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Extra dollars skip the line
Every scheduled payment is split in two: the interest the lender charges on what you still owe, then whatever remains toward principal. An extra payment skips that split entirely, because the month's interest is already paid, and lands 100% on principal. That single mechanic is why $100 extra on an $18,000 loan at 7.5% doesn't just shorten the loan by a few token months: it also deletes all the future interest that principal would have generated, year after year, for the rest of the term.
The compounding mirror
Compound interest works on both sides of your balance sheet. In a portfolio it grows your money; in a loan it grows the lender's. Prepaying debt is the mirror image of investing: a guaranteed, tax-free return exactly equal to the APR, with no market risk. There is no investment that reliably pays 24% to match a credit card, which is why high-rate balances are the best "investment" most people have access to. Our compound interest guide shows the growth side of the same curve, and juggling several balances at once is what the debt payoff calculator is built for.
Where extra payments belong in the order
The APR sets the priority. Debt above roughly 7-8% usually beats investing; debt under 4-5% usually loses to it; the zone between is a judgment call, with an employer 401(k) match outranking all of it. Our save-or-invest guide walks the full ordering, and snowball vs avalanche covers which balance to hit first when several qualify. The quiet prerequisite is knowing your balances and rates in one place at all, which is exactly the picture Stoia keeps current for you.
Frequently asked questions
How do extra payments pay off a loan faster?
Your required payment already covers that month's interest, so every extra dollar goes entirely to principal. A smaller principal means less interest next month, which means even more of the regular payment hits principal. The effect compounds in your favor every month for the rest of the loan.
Is it better to pay extra monthly or in one lump sum?
Dollar for dollar, sooner beats later: a lump sum today saves more interest than the same amount spread over the year, because principal removed early stops accruing interest for the longest time. In practice, a monthly extra you'll actually stick to usually beats a lump sum you're still waiting to make.
Do extra payments lower my monthly payment?
Usually no. On a standard loan the required payment stays the same and the loan simply ends earlier. Some mortgage lenders offer a recast (a fee to re-spread the smaller balance over the original term, lowering the payment), but the default effect of prepaying is a shorter loan, not a cheaper month.
What if my payment doesn't cover the interest?
Then the balance grows instead of shrinking, which is called negative amortization. The calculator flags this case: at a $10,000 balance and 24% APR, interest alone is $200 a month, so a $180 payment digs the hole deeper forever. The fix is a payment above the monthly interest, a lower rate, or both.
Should I make extra payments or invest the money instead?
Paying extra on a loan is a guaranteed, tax-free return equal to the APR. Against a 22% credit card it beats any realistic investment; against a 3% mortgage, long-run market returns usually win. Most orderings put high-rate debt before investing and low-rate debt after, with employer 401(k) matches ahead of everything.
Does this calculator save my numbers?
No. Everything runs in your browser and disappears when you leave. Nothing is uploaded or stored.
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