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How to use
This loan calculator estimates the monthly payment for a fixed-rate amortizing loan and compares the base schedule with a plan that adds a fixed extra amount every month. You can also include financed fees in the principal. The tool shows payoff time and total interest in both scenarios, then calculates the modeled time and interest savings.
- Enter the loan amount, annual interest rate and term, choosing years or months.
- Add any fees that are financed into the loan; do not add fees paid separately in cash.
- Enter an optional extra monthly payment to compare accelerated payoff with the base schedule.
- Review the base payment and planned payment, then compare payoff term, total interest, interest saved and months saved.
How it is calculated
Example
Illustrative example: a 100,000 loan at 6% annually for five years has a base payment of about 1,933.28 before financed fees. Adding 500 per month raises the planned payment to about 2,433.28 and, in this model, pays the loan off earlier with less total interest. Actual lender results can differ because of interest conventions, rounding and fees.
Important notes
This calculator uses a fixed nominal annual rate divided by 12 with monthly amortization. It does not automatically model APR, insurance, taxes, penalties, balloon payments or early-payoff fees. Actual early repayment may also be governed by contract or local law, so review the lender’s official schedule and agreement before making a decision.
Worked examples and interpreting results
A hypothetical 1200 loan for 12 months at 12% nominal annual interest has a monthly payment of about 106.62. Assume a fixed rate, no fees and no extra payments.
| Case | Calculation | Result |
|---|---|---|
| Monthly payment | 1200 × 0.01 ÷ (1 − 1.01⁻¹²) | 106.618546 |
| Total interest | 12 × (1200 × 0.01 ÷ (1 − 1.01⁻¹²)) − 1200 | 79.422557 |
How to check the result
Choose 12 months or 1 year. Monthly interest applies to the remaining balance; it is not flat interest charged on the original principal for the whole term.
Frequently asked questions
How is the monthly payment calculated?
The calculator uses a standard amortizing-loan formula where each payment covers interest and reduces principal.
What does the extra monthly payment do?
In this model it is added to the regular payment and reduces principal faster, which can shorten the term and lower total interest.
Do financed fees increase interest?
Yes in this model, because they are added to the financed principal and accrue interest with the rest of the balance.
Is the annual rate here the same as APR?
Not necessarily. The calculator treats it as a nominal annual rate; APR may include additional costs depending on the product and jurisdiction.
Can I enter the term in months?
Yes. Select months instead of years and enter the number of months directly.
Is the displayed saving the same as an official early-payoff quote?
No. It is the mathematical difference between two modeled schedules. An official payoff amount can include lender- or jurisdiction-specific rules and charges.