Early loan repayment calculator
Interest saved and term shortened by a regular extra payment.
Fill in the fields and the result will appear here automatically.
A fixed monthly extra payment reduces an annuity balance faster. This model keeps the original regular instalment and shortens the term. It compares nominal interest across the two schedules and allows a partial final payment. Charges, prepayment restrictions and rate changes are omitted; interest saved is not a guaranteed return from an alternative investment.
How it works
Formula and logic
Monthly i = r/1200; scheduled n = round(12×years). The original annuity A remains constant and M = A + extra. Month-end interest applies first, then M pays the balance. After k full payments the balance is S−(M−Si)[(1+i)^k−1]/i. An analytic payoff time identifies the closing month; its last payment is limited to remaining debt plus interest. At i = 0 the term follows S/M. Intermediate cash flows are not rounded to cents; displayed amounts use two decimals.
Example
Principal 3,000,000 monetary units, rate 18%, term 20 years and extra 10,000 give scheduled payment 46,299.35, closure in 108 rather than 240 months, total paid 6,072,694.68 and interest saved 5,039,148.29. With 1,200 at 0% for one year and extra 100, the original 100 becomes 200: closure in six months and zero interest saved.
Fields and units
- Loan amount — $
- Annual rate, % — unitless
- Term, years — years
- Extra principal per month — $
How to use
- — Enter principal, nominal annual rate and years.
- — Years become the nearest whole number of months, at least one.
- — Supply a nonnegative constant extra payment; blank means zero.
- — Compare payment counts, total paid and interest saved. Review your contract and needed cash reserve separately.
Method and limitations
- Calculation method
- Formula and logic
- Data or methodology source
- Microsoft PMT: constant rate, equal payments and end-of-period timing Microsoft NPER: period count with constant rate and payments
- Limitation
- Constant-rate annuity with month-end extras and a shorter term. Fees, insurance, taxes, day-count rules and contractual restrictions are absent; no personal recommendation is made.
FAQ
Does this extra-payment model reduce the term or the instalment?
The term. The original annuity stays fixed and a constant extra is paid from the first month. Reducing the regular instalment would require another model.
Why is the final payment with extra smaller than a full payment?
The remaining debt and interest are below A plus extra. Only that remainder is paid, avoiding an excess payment after closure.
Does early payoff require a loop through thousands of months?
No. A constant rate and payment have an analytic balance formula. Adjacent months are checked; an arbitrary loop cutoff is not treated as a repaid loan.
Is comparing loan interest with savings yield enough for a decision?
Compare matched cash flows, taxes, charges, risk and liquidity. This result is nominal interest saved, not a guaranteed investment return. Your contract determines prepayment procedure and costs.