# Loan Payoff Calculator

Calculate how extra payments accelerate your loan payoff. See months saved and interest saved vs. minimum payments. Free loan payoff calculator.

## What this calculates

See how much time and money you can save by making extra payments on your loan. Enter your balance, rate, and current payment, then add an extra amount to see the difference in payoff time and total interest.

## Inputs

- **Current Loan Balance** ($) — min 0 — The remaining balance on your loan.
- **Annual Interest Rate** (%) — min 0, max 30 — Your loan's annual interest rate (APR).
- **Current Monthly Payment** ($) — min 0 — Your current (minimum) monthly payment amount.
- **Extra Monthly Payment** ($) — min 0 — Additional amount you plan to pay each month above the minimum.

## Outputs

- **Payoff Time (Minimum Payments)** — Months to pay off with just the minimum payment.
- **Payoff Time (With Extra Payments)** — Months to pay off with the extra payment added.
- **Months Saved** — How many months sooner you pay off the loan.
- **Total Interest (Minimum Only)** — formatted as currency — Total interest paid with minimum payments.
- **Total Interest (With Extra)** — formatted as currency — Total interest paid with extra payments.
- **Interest Saved** — formatted as currency — How much less you pay in interest with extra payments.

## Details

Extra payments are one of the most powerful tools for paying off debt faster. Every extra dollar goes directly toward principal, which reduces the balance that accrues interest in future months. The earlier you start making extra payments, the bigger the impact.

For example, a $25,000 loan at 6% with a $500 minimum payment takes 56 months to pay off, costing $3,968 in interest. Adding just $200 extra per month ($700 total) pays it off in 39 months -- saving 17 months and $1,486 in interest. That $200/month extra payment effectively earns you a guaranteed 6% return.

Even small extra payments add up. An extra $50/month on that same loan saves 7 months and $560 in interest. An extra $100 saves 12 months and $1,030. The key insight is that extra payments have a compounding effect: less principal means less interest, which means more of your next payment goes to principal, and the cycle accelerates.

## Frequently Asked Questions

**Q: How much does an extra $100/month save?**

A: It depends on your balance and interest rate, but the savings are always significant. On a $25,000 loan at 6%, an extra $100/month saves about $1,030 in interest and 12 months of payments. On a $200,000 mortgage at 7%, an extra $100/month saves over $50,000 in interest and cuts years off the loan. Higher-rate loans benefit more from extra payments.

**Q: Should I make extra payments or invest the money?**

A: Compare your loan interest rate to your expected investment return. If your loan is at 6% and you expect 8-10% from investing, investing may win mathematically. But paying off debt offers a guaranteed, risk-free return equal to your interest rate. Many financial advisors suggest paying off high-interest debt (above 6-7%) before investing beyond employer 401(k) matches.

**Q: Does my loan have a prepayment penalty?**

A: Most personal loans, auto loans, and federal student loans do not have prepayment penalties. Some mortgages (especially older ones) and certain private loans may include them. Check your loan agreement or call your lender to confirm. If there is a penalty, calculate whether the interest savings from early payoff still exceed the penalty amount.

**Q: Is it better to pay extra monthly or make a lump sum payment?**

A: Both help, but consistent extra monthly payments are usually better for most people because they build a habit and reduce interest every month. A lump sum payment creates an immediate principal reduction, which is great when you receive a bonus or windfall. The ideal approach is consistent extra payments plus occasional lump sums when you can.

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Source: https://vastcalc.com/calculators/finance/loan-payoff
Category: Finance
Last updated: 2026-04-08