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How to use
This calculator starts from the current loan balance rather than reconstructing the original loan. It compares the current payment path with the same payment plus an extra monthly amount applied to principal.
- Enter current balance, annual APR and monthly principal-and-interest payment.
- Optionally enter an extra monthly principal payment.
- Compare payoff months, total interest, time saved and interest saved.
How it is calculated
Example
A balance of 20,000 at 6% APR with a 400 monthly payment can be compared with 450 to see the months and interest potentially saved.
Important notes
Educational estimate only, not financial advice. It assumes a fixed rate, monthly interest, regular payments and extra amounts applied directly to principal. Fees, penalties, escrow, daily-interest conventions and lender rules can change actual payoff figures.
Worked examples and interpreting results
A 1200 balance at zero interest with monthly payment 100 takes 12 months. An extra 50 makes payment 150 and shortens payoff to 8 months, with no interest savings in this zero-rate example.
| Case | Calculation | Result |
|---|---|---|
| Base payoff time in months | 1200 ÷ 100 | 12 |
| Months with extra payment | 1200 ÷ (100 + 50) | 8 |
How to check the result
Enter rate zero and extra payment 50. The model uses monthly payments on a declining balance; payoff fees and contract conditions are not inferred from these inputs.
Frequently asked questions
What if my payment does not cover monthly interest?
The calculator flags that the balance cannot amortize under that payment.
Does the extra payment reduce the required payment?
Not in this model; the required payment stays unchanged and payoff occurs sooner.
Are taxes and insurance included?
No. Enter principal-and-interest payment only.
Does every extra payment immediately reduce principal?
That depends on the lender and contract. Ask for the extra amount to be applied to principal and check prepayment fees or restrictions; otherwise it may be treated only as an advance future payment.