CalcArcade.

Loan Payoff Calculator

Enter your balance, interest rate and monthly payment to see when the loan will be gone. Add an extra monthly amount to see exactly how many months and how much interest you save.

Your numbers

Result

Estimate for information only, not professional advice. Last reviewed .

How we calculate it

Each month, interest is the remaining balance times the monthly rate (APR divided by 12). The payment first covers that interest and the rest reduces the balance. The calculator repeats this month by month until the balance reaches zero, so the last payment is usually smaller than the others.

With an extra payment, the same schedule is run again using the larger total payment. The difference between the two runs is your time saved and interest saved.

Assumptions and limits

  • Assumes a fixed rate and monthly compounding on the declining balance, which is how most installment loans work.
  • Does not include fees, late charges or prepayment penalties. Check your loan agreement for those.
  • If the payment is smaller than the first month of interest, the balance would never fall, so the calculator tells you instead of showing a result.

Frequently asked questions

Is it better to pay extra toward principal or make bigger regular payments?

The effect on interest is the same: any money that reduces principal sooner reduces future interest. Confirm with your lender that extra amounts are applied to principal and not held as an early next payment.

Why does paying a little extra save so much?

Interest is charged on the balance, so every dollar removed early stops earning interest for the rest of the loan. The savings grow the earlier you start and the higher the rate is.

Does this work for student loans and personal loans?

Yes, for any fixed-rate loan with monthly payments. Federal student loan servicers may apply extra payments in a specific order, so check how yours does.

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Worked example (a fixed example using the starting numbers, it does not change as you type)

Inputs: Current loan balance ($) = 18000; Interest rate (APR %) = 7.5; Current monthly payment ($) = 450; Extra monthly payment ($) = 100.

  • Payoff time with extra payments 3 years 1 month
  • Time saved 10 months
  • Total interest with extra $2,201.26
  • Interest saved $576.71
  • Payoff time without extra 3 years 11 months
  • Total paid with extra $20,201.26
  • Debt-free date November 2029

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Last reviewed: . Formulas and assumptions are described on our methodology page. For information only; not professional advice.