Loan Payoff Calculator

A loan charges interest on the balance you still owe, one month at a time. Each payment covers that month's interest first, and whatever is left over comes off the balance — on $12,000 at 9.5%, the first month's interest is $95, so a $250 payment moves the balance by $155. Next month the balance is a little smaller, the interest on it a little less, and a little more of the same payment reaches the balance. That slow shift is the whole story of a payoff, and it is why the early months feel like nothing is happening. It is also why this page asks for your payment rather than a term: a car loan, a personal loan and a student loan each come with a payment the lender set, and the question is where that payment lands.

An extra payment skips the interest step entirely: the month's interest is already paid, so every extra dollar lands on the balance. A smaller balance charges less interest next month, which leaves more of the regular payment for the balance too — the extra works twice. That is why the months it removes are worth more than the dollars you put in, and why the saving this page shows is interest you never get billed for rather than money back.

The optional finish line turns the question around. Instead of "when is it gone at this payment?", it asks "what payment makes it gone in this many months?" — the same arithmetic run backwards. The receipt shows that payment, how much more (or less) than today's it is, and what the interest comes to at it, so you can see the trade in your own dollars: a shorter loan costs more each month and less in total, and you decide which of those matters more right now.

A worked example

Take the defaults: $12,000 at 9.5%, paying $250 a month. The loan is gone in 5 years 1 month, and the interest over that time is about $3,156 — so the $12,000 owed costs about $15,156 to repay. Add $50 a month and the same loan ends in 4 years 1 month with about $2,487 in interest: the extra removed a full year and saved about $669. The extra payments themselves added up to $2,450 over those 49 months, which is the trade in full: $2,450 paid sooner, $669 never billed, and twelve months without the payment at all. Ask for it gone within 36 months instead and the receipt adds a third answer: a payment of about $384 — $134 more than today's — with about $1,838 in interest, some $1,318 less than staying at $250.

Common questions

I have several loans — which one does this look at, and which goes first? One at a time: one balance, one rate, one payment. To line them all up and see which order clears them cheapest or soonest, the debt payoff calculator compares highest-rate-first against smallest-balance-first in your own dollars and months, so the choice is yours with the cost of each in front of you.

Is there a penalty for paying a loan off early? It depends on the loan. Federal student loans have none, and most auto loans don't either — extra payments reduce the balance and the loan simply ends sooner. Some personal loans do charge one, usually a flat fee or a few months of interest, and a few auto contracts use precomputed interest (the interest is fixed up front rather than charged on the shrinking balance), which means paying early saves less than this page shows. The answer is in your loan agreement, under a heading like prepayment. One mechanical catch for any loan: a lender may apply an extra payment to next month's bill rather than to the balance unless told otherwise, and the saving shown here assumes it reaches the balance.

What about a mortgage? Same arithmetic, different starting point: a mortgage usually comes with a known term rather than a known payment, and its monthly bill bundles taxes and insurance that never touch the balance. The extra payment calculator starts from the loan's term and shows the before-and-after of paying extra, and the amortization schedule calculator prints every month of it — interest, principal, and the balance after each payment.

This is an estimate assuming a fixed rate, on-time payments, and no fees. Your lender's figures may differ by a few dollars from rounding and the day interest is charged, and by more if your rate is variable or your payment changes.