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Loan Payoff Calculator

Updated January 2026

A loan payoff calculator shows you how extra payments can shorten your loan term and save thousands in interest. Whether it's a mortgage, auto loan, student loan, or personal loan, see the impact of paying more each month.

How to Use This Calculator

Enter your current loan balance, interest rate, and remaining term. Then set an extra monthly payment amount. The calculator compares your original payoff schedule against the accelerated one, showing how many months you'll save and how much interest you'll avoid paying.

How It's Calculated

This calculator runs an iterative month-by-month simulation. In each period, the extra payment is applied directly to the principal:

Remaining Balance = Previous Balance − Principal Paid − Extra Payment

The simulation stops when the balance reaches zero. Interest saved = Original total interest − New total interest. The earlier you start making extra payments, the greater the savings since you're reducing the principal that future interest is calculated on.

Frequently Asked Questions

Even small extra payments can save thousands in interest. For example, on a $250,000 mortgage at 6% for 30 years, paying an extra $100 per month saves over $35,000 in interest and cuts nearly 5 years off the loan. The earlier you start making extra payments, the greater the savings because you're reducing the principal that future interest is calculated on.
Some lenders charge prepayment penalties, typically on certain types of loans like subprime mortgages or some personal loans. Federal law prohibits prepayment penalties on most FHA and VA loans, and many conventional loans no longer charge them. Always check your loan contract — if there's a penalty, calculate whether the interest savings from paying early exceed the penalty amount. Most mortgages allow you to pay up to 20% of the principal annually without penalty.
Making one extra mortgage payment per year — essentially 13 payments instead of 12 — can shorten a 30-year mortgage by 4 to 5 years and save tens of thousands in interest. The simplest way to do this is to divide your monthly payment by 12 and add that amount to each payment, or make biweekly payments (half the monthly payment every two weeks, resulting in 26 half-payments = 13 full payments per year).

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