Loan Payoff Calculator
See how extra payments shorten your loan and cut interest. Free loan payoff calculator showing months saved, interest saved and the payoff date.
About the Loan Payoff Calculator
Paying a little extra each month can knock years off a loan and save a surprising amount of interest. This free loan payoff calculator takes your balance, interest rate and regular payment, adds an optional extra payment, and shows how much sooner you finish and how much interest you avoid compared with paying the minimum.
It amortises the loan month by month: each payment first covers the interest on the current balance, and the rest reduces the principal. Extra payments go straight to principal, so every future month accrues less interest — a compounding benefit that grows over the life of the loan.
Homeowners, car buyers and anyone with a personal loan use this to decide whether to overpay or invest the difference. Everything computes in your browser with no signup.
How to Use the Loan Payoff Calculator
- 1Enter the current loan balance and the annual interest rate.
- 2Enter your regular monthly payment.
- 3Add an optional extra monthly payment.
- 4Read the payoff time, interest paid and how much you save versus no extra payment.
Frequently Asked Questions
How much can extra payments save me?
It depends on the rate and balance, but the effect is large. On a 2,000,000 loan at 10% over 20 years, paying an extra 5,000 per month can finish the loan around 5 years early and save several hundred thousand in interest. The calculator shows the exact figures for your loan.
How does a loan payoff work month by month?
Each payment covers that month's interest (balance × monthly rate) first; the remainder cuts the principal. Early on, most of the payment is interest; as the balance falls, more goes to principal, which is why extra payments early save the most.
Is it better to pay off a loan early or invest?
Compare the loan rate with your expected after-tax investment return. If your loan charges 12% and you can reliably earn only 8% investing, paying down the loan is the better guaranteed return. If the loan is cheap, investing may win — but overpaying is risk-free.
Do extra payments always reduce interest?
Yes, provided your lender applies them to principal and charges no prepayment penalty. Confirm both with your lender: some loans have penalties or apply extra amounts to future instalments rather than the balance, which reduces the benefit.