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Early payoff calculator

See how much interest and time extra monthly payments save on your loan, with a new payoff date and an annual schedule.

Required fields are marked with an asterisk (*).

The remaining loan balance you plan to pay off early.
The annual interest rate on the loan.
The remaining base term, in months or years depending on the chosen unit.
Term unit
Choose whether the term is measured in months or years.
The extra amount you pay each month on top of the base payment (optional).
The currency used to display the results.

Extra payments on your loan — however small they seem — shorten the term and save interest you may not expect. Enter your loan amount, interest rate and remaining term, then the extra amount you plan to pay each month, to see your new payoff period and the interest saved, with an annual schedule tracking the payoff path.

Formula

The base payment uses the fixed-rate annuity formula, then the payoff is simulated month by month: the extra amount is added to the payment, interest is charged on the remaining balance, and the rest reduces the principal until the balance reaches zero.

When is this useful?

Use this calculator when you have some extra cash each month and want to direct it at paying off a loan faster, to see how much it shortens the term and how much interest you save before committing.

Worked example

Example using the calculator’s values: a 20,000 Jordanian dinar loan at 6% per year for 5 years.
An extra monthly payment of 100 dinars.
The baseline payment is about 386.66 dinars and the baseline payoff 60 months.
The new payoff is about 54 months, saving over 500 dinars in interest.

Assumptions

  • The interest rate is fixed for the whole loan term.
  • The extra payment is constant and made every month alongside the base payment.
  • The extra amount reduces the principal after monthly interest is charged.
  • Early-payoff fees, if any, are not included.
  • Results are estimates for general planning.

Common mistakes

  • Assuming small extra payments do not matter: even a modest monthly amount shortens the term and saves interest.
  • Forgetting that the savings depend on the remaining term and the interest rate.
  • Assuming the extra payment all goes to interest: it reduces the principal after monthly interest is charged.
  • Ignoring early-payoff fees that some lenders charge.

Frequently asked questions

Does the whole extra payment go to the principal?

Monthly interest is paid first from the total payment (base plus extra), and the rest reduces the principal — which is what speeds up the payoff.

What if I only pay extra once?

This calculator assumes a constant monthly extra payment. For a one-off payment, the effect on the term and interest is smaller.

Does it work on a zero-interest loan?

There is no interest to save, but the term shortens by the effect of the extra payments.

Methodology and review

The calculator simulates the payoff month by month: interest accrues on the remaining balance and the extra payment reduces the principal. Results are approximate and may differ from your lender’s statement due to early-payoff fees or rate changes.

Results are estimates for informational purposes only and do not constitute financial advice or a lending offer.

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