Early Loan Payoff Calculator

How to use this calculator

1. Enter the original loan amount, the amount you borrowed.
2. Enter the APR from your loan agreement.
3. Enter the term in months. A five-year loan is 60 months.
4. Enter the payments already made. Zero if the loan is new.
5. Add an extra monthly payment, starting with your next payment.
6. Add a one-time lump sum and the month you plan to pay it, if you have one.

If you already know your current balance and payment, the loan payoff calculator starts from those instead.

What the results mean

Current balance

What you should owe after the payments made so far, if every payment was on time and for the scheduled amount. Compare it with your statement. A big gap can come from late payments, fees, earlier extra payments or daily interest.

Remaining interest on schedule

The interest still ahead of you if you pay exactly as scheduled.

New payoff date

When the loan ends with your extra payments.

Interest saved and time saved

The difference between your plan and the original schedule. Extra money goes straight to principal, so it lowers the interest charged in every month that follows.

Worked example

Take a $25,000 loan at 7% APR for 60 months. The scheduled payment is $495.03, and the loan costs $4,701.82 in interest over the full term.

Add $100 a month from the very first payment. You save $939.02 in interest and finish 11 months early.

Starting the same $100 extra two years in saves less, because the balance is already smaller and there are fewer months left for the savings to build. Enter 24 payments made above to see the difference for yourself.

Is paying a loan off early worth it?

Every dollar of extra principal saves the loan’s APR on that dollar for the rest of the term. That saving is certain, but it’s only as high as your loan’s rate. Two checks come first.

Prepayment penalties. The CFPB says your contract and state law decide whether you can pay a loan off early without a fee. Look in the loan agreement and Truth in Lending disclosures.

Precomputed interest. On a simple-interest loan, extra payments cut interest. On a precomputed-interest loan, the CFPB explains, the interest is fixed at the start and spread across the payments, so paying early saves less, though you may get a refund of some unearned interest. The CFPB says simple interest is far more common on auto loans.

How we calculate this

The scheduled payment comes from the standard loan formula for your original amount, APR and term. The calculator runs that schedule for the payments made to get today’s balance, then continues month by month with your extra, charging interest at the APR divided by 12 and rounded to the cent. The final payment is exactly what’s left. See the methodology page.

Related

• Car loan payoff calculator: the same math for auto loans.
• Should I pay off my car loan early?: the trade-offs.
• Pay off debt or invest?: where extra money goes further.

FAQ

How do I pay off a loan early?

Pay more than the scheduled amount, either a little extra each month or a lump sum when you can. Check first that your loan has no prepayment penalty, and ask your lender to apply the extra to principal. Each extra dollar lowers the balance that interest is charged on, so the loan ends sooner.

How much will I save by paying $100 extra a month?

On a $25,000 loan at 7% for 60 months, adding $100 from the first payment saves $939.02 in interest and ends the loan 11 months early. The savings depend on the rate, the balance and how many months are left, so enter your own loan above.

Does paying extra lower my monthly payment?

Not in this calculator. It keeps your scheduled payment the same, so extra payments shorten the loan instead of lowering the bill. Your loan agreement says how your lender handles it. If your lender offers to recalculate the payment after a large prepayment, ask how that changes the total interest you pay.

Is it better to pay extra early in the loan?

Yes. Early in a loan the balance is highest, so a larger share of each payment goes to interest. Extra principal paid then saves interest for every remaining month. The same extra paid near the end saves much less, because there are only a few months of interest left to avoid.

Can I pay off my loan early without a penalty?

It depends on the loan contract and your state’s law, according to the CFPB. Some loans include a prepayment penalty and some do not. Read your loan agreement and Truth in Lending disclosures, or ask your lender. If a penalty applies, compare it with the interest saved shown above.