Before paying a loan off early, check for prepayment penalties and compare the interest rate with what your money could earn elsewhere. High-interest debt is almost always worth paying down first.
How to use the Early Loan Payoff Calculator
- Loan balance
- Interest rate
- Remaining term
- Extra monthly payment
- Target payoff time
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter the loan balance, interest rate, remaining term, the extra payment and an optional target payoff time.
Tips
- Compare loans by APR and total cost, not just the monthly payment.
- Extra payments go straight to principal and can save a lot of interest.
- Pay off the highest-rate debt first if you want to save the most money.
- Check for prepayment penalties before paying a loan off early.
Common mistakes to avoid
- Stretching a loan term to lower the payment without seeing the extra interest.
- Paying only the minimum on credit cards.
- Forgetting fees that are rolled into the loan.
Inputs explained
| Field | What to enter |
|---|---|
| Loan balance | Amount in your currency |
| Interest rate | In % |
| Remaining term | Units: years, months |
| Extra monthly payment | Amount in your currency |
| Target payoff time | In months |
What each result means
- Current monthly payment = pmt([Interest rate]÷1200, [Remaining term], [Loan balance])
- New payoff time = nper([Interest rate]÷1200, [Current monthly payment] + [Extra monthly payment], [Loan balance])
- Months saved = [Remaining term] – [New payoff time]
- Interest without extra payments = [Current monthly payment]×[Remaining term] – [Loan balance]
- Interest with extra payments = ([Current monthly payment] + [Extra monthly payment])×[New payoff time] – [Loan balance]
- Interest saved = [Interest without extra payments] – [Interest with extra payments]
- Extra payment needed for the target = max(pmt([Interest rate]÷1200, [Target payoff time], [Loan balance]) – [Current monthly payment], 0)
Example values
How the main result changes when Loan balance changes and everything else stays at the example values above:
| Loan balance | Interest saved |
|---|---|
| 12,500 | 1,079.7 |
| 18,750 | 1,262.8 |
| 25,000 | 1,379.89 |
| 31,250 | 1,461.24 |
| 37,500 | 1,521.04 |
| 50,000 | 1,603.08 |
Formula
Original payment = pmt(i, remaining months, balance)New payoff time = nper(i, payment + extra, balance)Extra needed for a target = pmt(i, target months, balance) − paymentWorked example
Inputs — Loan balance: $25,000; Interest rate: 7.5 %; Remaining term: 5 years; Extra monthly payment: $150; Target payoff time: 36 months.
Results — Current monthly payment = $500.95; New payoff time = 44 months; Months saved = 16; Interest without extra payments = $5,056.92; Interest with extra payments = $3,677.03; Interest saved = $1,379.89; Extra payment needed for the target = $276.71.
Frequently asked questions
Is it smart to pay off a loan early?
Usually, if there's no prepayment penalty and the rate is higher than your safe savings rate.
Do extra payments go to principal?
Tell your lender to apply them to principal, not future payments.
Which loan should I pay off first?
The one with the highest interest rate.
What formula does the Early Loan Payoff Calculator use?
Original payment = pmt(i, remaining months, balance).