How to use this calculator
Use this calculator for a loan you already have. The results update as you type.
- Loan balance left: what you owe today. Your lender’s app or statement often shows a payoff amount.
- Interest rate (APR): the APR on your loan agreement.
- Current monthly payment: your required payment.
- Extra payment each month: any amount you plan to add on top.
- One-time extra payment now: a lump sum, such as a bonus or tax refund, paid straight away.
- Prepayment penalty: a fee for paying early, if your loan agreement has one.
The results compare your current plan with paying extra: monthly payment, time left, payoff date and interest. The headline shows what you’d save after any penalty. Below, the chart shows the total you have left to pay on each plan, and the schedule lists every payment when paying extra.
Example: $12,000 left at 11.5% APR
Say you owe $12,000 at 11.5% APR and pay $350 a month. On your current plan, you’ll be debt-free in 42 months (3 years 6 months) and pay $2,618.25 in interest.
| Plan | Time left | Interest | Saving |
|---|---|---|---|
| Current payment, $350 | 42 months | $2,618.25 | none |
| $50 extra a month | 36 months | $2,216.70 | $401.55 |
| $100 extra a month | 31 months | $1,924.08 | $694.17 |
| $200 extra a month | 25 months | $1,527.44 | $1,090.81 |
| $2,000 lump sum now | 34 months | $1,741.19 | $877.06 |
| $2,000 now and $100 a month | 26 months | $1,299.15 | $1,319.10 |
Notice the lump sum. Paying $2,000 once saves more interest than paying $100 extra every month until the loan is gone, even though those monthly extras add up to more than $2,000. Money that reduces the balance today avoids interest for every remaining month.
If your loan had a $250 prepayment penalty, the $100-a-month plan would still save you $444.17. A penalty above $694.17 would wipe out the saving, and the calculator would warn you.
How it’s calculated
Each month, interest is the balance × APR ÷ 12. The rest of your payment reduces the balance, and the last payment is only what’s left.
- Current plan: your current payment, month by month, until the balance reaches zero.
- Paying extra: the balance minus any one-time payment, repaid at your current payment plus the monthly extra.
- You save = interest on the current plan − interest paying extra − prepayment penalty.
The calculator assumes extra money goes straight to principal, the rate doesn’t change, and you make every payment on time. Your payment must be more than one month’s interest, or the balance would never go down. Figures are calculated at full precision and rounded for display, so they may differ by a few cents from your lender’s statements.
Tips for paying off a loan early
- Check for a prepayment penalty first. Your loan disclosures must say whether one may apply. Enter it to see the real saving.
- Keep an emergency fund. Don’t use your last savings to pay down a loan. If something goes wrong, you may end up borrowing again at a higher rate.
- Pay off higher-rate debt first. If you also carry a credit card balance, extra money usually saves more there.
- Use windfalls. A tax refund or bonus paid as a lump sum early in the loan saves the most interest.
- Ask for extra to go to principal. Confirm how your lender applies extra payments, and check your next statement to see the balance fall.
- Round up your payment. Even rounding $350 up to $400 clears this example loan 6 months sooner.
Frequently asked questions
Is it worth paying off a personal loan early?
Paying early saves interest because interest is charged on the balance you still owe. It's usually worth it if your loan has no prepayment penalty and you already have an emergency fund. Enter your numbers above to see the saving.
Does my personal loan have a prepayment penalty?
Check your loan agreement. For loans where interest is charged on the unpaid balance, federal rules require the lender's disclosures to state whether or not a charge may be imposed for paying all or part of the principal early. If yours charges one, enter it to see your net saving.
Is a lump sum or extra monthly payments better?
Money paid earlier saves more interest. In our example, a $2,000 lump sum now saves $877.06, more than $100 extra a month saves ($694.17), even though the monthly extras add up to more than $2,000. The best choice is the one you can afford without draining your savings.
How much does $100 extra a month save?
On a $12,000 balance at 11.5% APR with a $350 payment, an extra $100 a month clears the loan 11 months sooner and saves $694.17 in interest. The saving is bigger on larger balances and higher rates.
Will paying off a loan early lower my monthly payment?
Usually not. Extra payments shorten the loan rather than lowering the required payment, so you keep paying the same amount until the balance is gone. Ask your lender how they apply extra payments.
How do I make sure extra payments go to principal?
Ask your lender. Some apply extra money to the principal straight away; others hold it as an early payment of next month's bill. Look for an option to apply it to principal when you pay online.