Loan Payoff Calculator
How the Calculator Works
Enter your loan amount, interest rate, loan term, and extra payment amount.
The calculator shows how each additional payment reduces your interest and shortens the loan term.
It uses an amortization formula that applies the extra payment to principal balance each month, recalculating interest and term length dynamically.
Formula & Explanation
Amortization with extra payment:
M = P[i(1 + i)^n] / [(1 + i)^n – 1]
Then subtract any extra principal after each payment to find the new balance.
As principal decreases, less interest accrues, so you finish faster and pay less total interest.
Example Calculation
Loan: $20,000
Rate: 8%
Term: 5 years
Standard payment = $406
Add $50 extra monthly → payoff in 52 months instead of 60, saving ~$440 in interest.
How to Use This Tool
- Enter loan amount, interest rate, and term.
- Add optional extra monthly payment.
- Click Calculate to view revised payoff date and interest saved.
- Adjust values to find your optimal strategy.
Features & Benefits
- Shows impact of extra payments instantly
- Calculates interest savings and new term
- Works for car, personal, or student loans
- Motivates faster debt payoff
- 100% free to use
FAQs
Q1: Does making one extra payment a year help?
A1: Yes — one extra payment annually can shorten a 30-year loan by 4–5 years.
Q2: What happens if I make biweekly payments?
A2: Biweekly payments equal 13 monthly payments yearly, reducing total interest.
Q3: Does it apply to any loan?
A3: Yes, any amortized loan — auto, personal, or student.