Loan Payoff Calculator: Payment & Interest
Use this loan payoff calculator to compute the monthly payment, total interest, and payoff date on any installment loan. Standard amortization for any term and rate.
$
%
months
$
Standard payment$0
With extra → months saved0
Interest saved$0
Total paid (with extra)$0
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How this calculator works
Loans amortize using the standard installment formula. Once you know the regular payment, the impact of any extra monthly payment is simply a shorter remaining term:
PMT = P × r / (1 − (1+r)−n)
n_new = −log(1 − r × P / (PMT + extra)) / log(1+r)
n_new = −log(1 − r × P / (PMT + extra)) / log(1+r)
- P
- Starting loan balance
- r
- Monthly rate (APR / 12)
- n
- Number of months in the original term
Extra payments compound: each $1 extra paid early avoids that dollar's worth of interest for the remainder of the loan. On a 5-year, 7.5% APR auto loan, an extra $100/month shaves ~13 months off and saves ~$700 in interest.
Source: Standard amortization formula — see any finance textbook or the CFPB owning-a-home guide.
FAQ
Where should the extra payment go in the lender's system?
Most lenders default to applying extra to NEXT month's payment, which doesn't save interest. You usually need to specify 'apply to principal' in the payment portal or call to set up automatic principal-only extra payments. Verify on your next statement that the extra reduced the principal, not the next month's bill.
Should I pay extra on a low-rate loan or invest the difference?
Standard answer: if your loan rate is below ~5–6% (after-tax), invest the difference; if above, pay down the loan. The S&P real return is ~7%, so a 4% mortgage loses to investing on average. But debt payoff is a guaranteed return; investing isn't. Risk tolerance matters.
How is loan payoff calculated?
Standard amortization formula: PMT = balance × r / (1 − (1+r)−n), where r is the monthly rate (APR ÷ 12) and n is months remaining. To find when extra payments retire the loan, solve for n: n_new = −log(1 − r × balance / PMT_new) / log(1 + r).
Does paying off a loan early hurt my credit score?
Slightly, in the short term. Your credit mix and average account age can dip when an installment loan closes. The hit is usually 5–15 points and recovers within 6–12 months. The interest savings far outweigh the temporary score wobble.
What's the biweekly payment trick?
Pay HALF the monthly amount every two weeks instead of the full amount once per month. 26 half-payments per year = 13 monthly equivalents, which is one extra full payment per year applied to principal. On a 30-year mortgage this trims about 5–7 years off the term.
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