Loan Payoff Calculator
Calculate how extra payments reduce your loan payoff time and total interest. Compare monthly, yearly, and lump sum payment strategies to find the best approach.
Loan Details
Extra Payments
Interest Saved
Pay off 12 months earlier
With vs Without Extra Payments
| Current Plan | With Extra | Savings | |
|---|---|---|---|
| Payoff Time | 61 months | 49 months | 12 months |
| Total Interest | $5,069 | $4,051 | $1,018 |
| Total Paid | $30,069 | $29,051 | $1,018 |
| Payoff Date | January 2031 | January 2030 |
Extra Payment Scenarios
| Extra/Month | Payoff Time | Interest Saved | Time Saved |
|---|---|---|---|
| $50 | 54 mo (4.5 yrs) | $567 | 7 months |
| $100 | 49 mo (4.1 yrs) | $1,018 | 12 months |
| $200 | 41 mo (3.4 yrs) | $1,690 | 20 months |
| $300 | 35 mo (2.9 yrs) | $2,168 | 26 months |
| $500 | 28 mo (2.3 yrs) | $2,800 | 33 months |
| $1,000 | 18 mo (1.5 yrs) | $3,586 | 43 months |
Biweekly Payment Option
Pay $250 every two weeks instead of $500 monthly. This equals one extra monthly payment per year.
Savings: $482 in interest, pay off in 55 months instead of 61.
Payoff Schedule (With Extra Payments)
| Month | Payment | Principal | Interest | Balance |
|---|---|---|---|---|
| 1 | $600 | $444 | $156 | $24,556 |
| 2 | $600 | $447 | $153 | $24,110 |
| 3 | $600 | $449 | $151 | $23,660 |
| 4 | $600 | $452 | $148 | $23,208 |
| 5 | $600 | $455 | $145 | $22,753 |
| 6 | $600 | $458 | $142 | $22,296 |
| 7 | $600 | $461 | $139 | $21,835 |
| 8 | $600 | $464 | $136 | $21,371 |
| 9 | $600 | $466 | $134 | $20,905 |
| 10 | $600 | $469 | $131 | $20,436 |
| 11 | $600 | $472 | $128 | $19,963 |
| 12 | $600 | $475 | $125 | $19,488 |
Loan Payoff Strategies
Extra Principal Payments
Even small extra payments make a big difference. An extra $100/month on a $25,000 loan at 7.5% saves thousands in interest and years of payments. Specify "principal only" when making extra payments.
Biweekly Payments
Paying half your monthly payment every two weeks results in 26 half-payments (13 full payments) per year instead of 12. This one extra payment per year significantly reduces payoff time.
Lump Sum Payments
Tax refunds, bonuses, or windfalls applied to loan principal have an immediate impact. The earlier you make lump sum payments, the more interest you save over the life of the loan.
Frequently Asked Questions
Extra Payment Impact
Example: $25,000 loan at 7.5%, $500/month payment:
| Extra/Month | Payoff Time | Interest Saved |
|---|---|---|
| $0 | 62 months | $0 |
| $50 | 52 months | $800 |
| $100 | 46 months | $1,400 |
| $200 | 38 months | $2,200 |
Biweekly Payment Strategy
- Pay half your monthly payment every 2 weeks
- Results in 26 half-payments = 13 full payments/year
- One extra payment per year without budgeting for it
- Can shave years off a mortgage
Pay Off Debt vs Invest?
- High-interest debt (7%+): Usually pay off first
- Low-interest debt (3-4%): Investing may win
- Guaranteed return: Paying debt = guaranteed return
- Peace of mind: Being debt-free has value
Tips for Extra Payments
- Specify "apply to principal" when paying extra
- Use tax refunds and bonuses for lump sums
- Round up payments to nearest $50 or $100
- Automate extra payments so you don't forget