Loan Payoff Calculator
See how extra payments shorten your loan term and reduce interest. Works for personal, auto, student, and other fixed-rate loans.
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These calculators provide estimates for educational purposes only. Results are not guaranteed and should not be treated as financial advice. Always consult a qualified professional before making major financial decisions.
Every $1,000 you owe at 10% APR costs you $100 in interest this year alone. The interest is visible; time is not. At minimum payments on a $10,000 personal loan at 10%, you pay for 5 years and hand over $2,748 in interest. Double the payment and you are done in 2 years, paying $1,067. The faster you pay, the less your debt earns against you.
Read more - how it works, tips & FAQs
How to use this calculator
- Enter your current loan balance, APR, and remaining term.
- See your minimum monthly payment and total interest over the full term.
- Add an extra payment amount (monthly, one-time, or recurring) to see the impact.
- Review the dynamically updated amortization table showing each month's progress.
How to calculate this by hand
M = P × [r(1+r)ⁿ] / [(1+r)ⁿ – 1]
M = monthly payment, P = principal, r = monthly rate (APR ÷ 12), n = total payments (term in months). To find payoff time at a higher payment, rearrange: n = log(M / (M – P×r)) / log(1+r). Higher payment → fewer months → less total interest.
$10,000 Loan -- Minimum vs. Accelerated
- Loan: $10,000 at 9% APR for 5 years
- Minimum payment: $208/month
- Total interest on minimum: $2,450
- With $100 extra ($308/month): pays off in 3.1 years
- Total interest with extra: $1,480
- Savings: $970 and 23 months of payments
Result: Adding $100/month to a $10,000 loan saves $970 in interest and gets you debt-free nearly 2 years sooner.
Tips
- Round up every payment automatically: If your minimum is $208, set autopay for $250. The extra $42/month on a $10K loan at 9% saves $510 in interest and cuts 9 months off the term. Set it once and forget it.
- Use windfalls for lump-sum principal payments: Tax refunds, bonuses, and gifts have the biggest impact when applied as lump-sum principal payments. A $2,000 lump sum on a $10K loan at 9% saves $890 in interest and cuts 15 months off the term.
- Check for prepayment penalties on private loans: Some personal and auto loans charge 1-2% of the remaining balance if you pay off early. If your loan has one, calculate whether the interest savings exceed the penalty before accelerating.
- Target the highest-rate debt first: If you have multiple loans, every extra dollar should go to the highest APR while making minimums on the rest. This is the avalanche method and it minimizes total interest paid every time.
Common mistakes to avoid
- Refinancing to a longer term to lower payments - Extending a 3-year loan to 5 years to save $50/month costs you thousands in extra interest. The total cost of your loan increases even though the payment drops. Only extend if you are genuinely struggling to make payments.
- Making extra payments but not marking them principal-only - Some lenders apply extra payments to future interest or next month's payment by default. You must explicitly request principal-only application. Check your statement to verify the extra went where you intended.
- Paying off low-interest debt before investing - If your loan is at 3-4% and you could earn 7-10% in the market, investing wins. The exception is emotional -- if being debt-free matters more to you than maximizing returns, pay it off. Just know you are leaving money on the table.
FAQ
Does paying off a loan early hurt my credit score?
Temporarily, yes -- because your average account age drops and you lose the mix of credit types. But paying off debt is always a net positive for your financial health. Your score recovers within a few months.
How do biweekly payments save money?
Instead of 12 monthly payments, you make 26 half-payments = 13 full payments per year. That one extra payment annually reduces your principal faster. On a $20K loan at 6%, biweekly saves about $600 in interest.
Should I pay off debt or build an emergency fund first?
Build a $1,000 starter emergency fund, then aggressively pay down above 8% APR debt. Once that debt is gone, build the full 3-6 month emergency fund. Without the starter fund, an emergency forces new debt at potentially higher rates.
Related resources
- Complete Debt Payoff Roadmap - A step-by-step plan to become debt-free using proven strategies.
- Debt Snowball vs. Avalanche - Compare debt payoff methods to find the right strategy for you.