Loan Payoff Calculator: Extra Payments and Savings
Use this loan payoff calculator to see how much an extra monthly payment shortens your loan and how much interest it saves.
How extra payments work
Each monthly payment covers that month’s interest first; the rest reduces principal. Any extra payment goes entirely to principal, so future interest charges shrink and the loan ends sooner.
Loan payoff example
A loan with $15,000 remaining at 8% APR and 48 months left:
- Current payment: about $366
- Interest left to pay: about $2,580
- Adding $100 a month pays it off in about 37 months — 11 months sooner — and saves roughly $640 in interest.
Should you pay off a loan early?
- Build an emergency fund first: three to six months of expenses — see the emergency fund guide.
- Get the full 401(k) match before prepaying low-rate debt.
- Rank debts by rate: credit cards first, then personal and auto loans, then mortgages. Compare strategies in debt snowball vs avalanche.
- Compare with savings yields: paying off an 8% loan is a guaranteed 8% return; check yields with the savings interest calculator.
See the full schedule for a new loan with the loan calculator or mortgage calculator.
Frequently Asked Questions
Is it better to pay extra on a loan?
Extra principal payments reduce interest and shorten the loan. It usually makes sense once you have an emergency fund and are capturing any employer 401(k) match, especially when the loan rate is high.
How much does an extra $100 a month save?
On a $15,000 balance at 8% APR with 48 months left, an extra $100 a month pays the loan off about 11 months sooner and saves roughly $640 in interest.
Are there prepayment penalties?
Most auto and personal loans have none, and most US mortgages originated today can’t charge them after the first few years. Check your loan documents to be sure.
This content is for general information only and is not investment advice. Consider your own situation and consult a licensed professional before making financial decisions.