Extra Payment Calculator
This extra payment calculator compares your fixed-rate loan on schedule against the same loan with an extra amount paid every month, and shows exactly how many months and how much interest the extra payment eliminates.
Free tool · No sign-up · Using it has no impact on your credit score
The loan's annual rate — it's on your loan agreement or statement.
Paid on top of the scheduled payment, applied to principal.
Time saved
1 year 6 months
Paying $100.00 extra each month, you finish 1 year 6 months ahead of schedule.
Interest saved
$1,594
$1,594 of interest that never gets charged — every extra dollar hits principal, and interest can only accrue on principal that's still there.
New payoff time
3 years 7 months
Your loan clears in 3 years 7 months instead of the scheduled 5 years 1 month.
Scheduled monthly payment
$337.47
Your regular payment stays the same; the extra goes straight to principal and shortens the loan instead.
Balance with and without extra payments
- Scheduled payments
- With extra payment
What this calculator tells you
This calculator shows what a monthly extra payment actually buys on a fixed-rate loan: the months it removes from the schedule and the interest it deletes from the total. Amortized loans front-load interest — early payments are mostly interest, late ones mostly principal — so extra dollars paid early do disproportionate damage to the lifetime interest bill.
The comparison is honest about the mechanism: your required payment never changes. The extra amount attacks the principal directly, which means every subsequent month's interest is calculated on a smaller balance, which frees more of the regular payment for principal, and so on — a compounding effect running in your favor for once.
How it works
First the calculator derives your scheduled payment from the loan amount, APR, and term using the standard amortization formula. Then it runs two month-by-month simulations: one paying exactly the scheduled amount, one paying the scheduled amount plus your extra. Time saved and interest saved are the differences between the two runs' payoff months and interest totals.
Formula and assumptions
The scheduled payment is P × i ÷ (1 − (1 + i)^−n), where P is the loan amount, i the monthly rate (APR ÷ 12), and n the term in months. Each simulated month: interest = balance × i, and the balance falls by (payment − interest). The boosted run uses payment + extra; the loan simply ends when the balance hits zero, months early.
Assumptions worth knowing: the extra amount is paid every single month without fail, the lender applies it to principal immediately (not as a prepayment of next month's bill — see the FAQ, this matters), and there are no prepayment penalties. The APR is treated as fixed for the life of the loan, which is true of standard personal and auto loans.
Example scenario
A $15,000 loan at 12.5% APR over 60 months, with an extra $100 paid monthly, works out like this:
- Time saved
- 1 year 6 months
- Interest saved
- $1,594
- New payoff time
- 3 years 7 months
- Scheduled monthly payment
- $337.47
Is my result good or bad?
A useful benchmark: an extra payment worth 20–30% of your scheduled payment typically cuts a five-year loan by well over a year and eliminates a quarter or more of the total interest — the example's $100 on a ~$337 payment lands squarely there, saving around a year and a half. If your extra payment is saving you only a month or two, either the loan is nearly done (in which case, fine) or the rate is so low that prepaying isn't where your money works hardest.
The rate is the referee. Above roughly 8–10% APR, prepaying is a guaranteed return few investments match, and the calculator's savings figure is money in the bank. Below about 5–6%, the math flips: a high-yield savings account or index investing plausibly beats prepayment, and liquidity has value — money sent to a loan can't be retrieved in an emergency. Whatever the rate, never prepay at the expense of high-interest card debt or an empty emergency fund; those come first.
Frequently asked questions
How much does an extra $100 a month save on a loan?
On the example loan — $15,000 at 12.5% over 60 months — an extra $100 a month clears the debt roughly a year and a half early and saves on the order of $1,500 in interest. The savings scale with the rate and the remaining term: higher APRs and longer loans reward extra payments more, and starting early beats starting late because early balances are the biggest.
Do extra payments reduce my monthly payment?
No — on a standard amortized loan the required payment is fixed by contract. Extra payments shorten the loan instead: the principal falls faster, so the final payment arrives months or years early and the interest that would have accrued in those months never gets charged. (A payment reduction requires refinancing or a formal "recast", which personal and auto lenders rarely offer.)
Should I tell my lender to apply extras to principal?
Yes — this is the single most important mechanical detail. Many servicers default to treating extra money as an early payment of next month's bill, which advances your due date but saves you almost nothing. Specify "apply to principal" in the payment portal (many have a dedicated field) or in writing, then check the next statement to confirm the principal balance dropped by the extra amount.
Are there prepayment penalties on personal loans?
Rarely, anymore — most mainstream personal lenders and virtually all major auto lenders charge nothing for early payoff, and many states restrict such penalties. Check anyway: search your loan agreement for "prepayment", "early payoff", or "precomputed interest". The one structure to avoid is a precomputed-interest loan, where total interest is fixed up front and prepaying saves little regardless of penalties.
Should I make extra payments or invest the difference?
Compare the loan's APR against a realistic after-tax investment return. At 12.5%, prepaying is a guaranteed 12.5% return — nothing liquid and safe comes close, so prepay. Below roughly 5–6%, diversified investing or even a high-yield savings account plausibly wins, and it keeps the money accessible. In between, it's a judgment call where the guaranteed, risk-free nature of prepayment counts for a lot.
Is one big annual extra payment as good as monthly extras?
Almost — the totals differ only modestly, but timing matters within the year. Twelve monthly $100 payments beat a single $1,200 payment made at year-end, because each early $100 stops accruing interest eleven, ten, nine months sooner. Flip it and a $1,200 lump at the start of the year beats the monthly drip. The practical rule: send extra money as soon as you have it; the schedule matters less than the promptness.
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Estimates only. Results assume the inputs you provide and standard fixed-rate math. Actual lender offers, rates, and terms are determined by lending partners based on your credit profile and state. BankMinistry is not a lender. Not financial advice.