Extra Payment Calculator
Adding even a small amount to your monthly loan payment can save thousands in interest and shave years off your loan. Enter your loan details and an extra monthly amount to see the impact.
How it works
First we compute your standard amortized payment using the formula P*r/(1-(1+r)^-n), where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the number of months.
We then simulate the loan month by month two ways: with your normal payment, and with the extra amount added each month. Each month, interest accrues on the remaining balance and your payment reduces the principal. The extra dollars go straight to principal, so the balance falls faster and less interest accumulates over time.
Comparing the two scenarios shows your total interest saved and how many months earlier the loan is paid off.
Tips
Confirm your lender applies extra payments to principal, not to future scheduled payments — call and specify if needed.
Even modest extra amounts compound into large savings on long mortgages because early payments mostly cover interest.
Check for prepayment penalties before committing to an aggressive payoff plan.
FAQ
Does an extra payment really save that much interest?
Yes. Because interest is charged on the remaining balance, reducing principal early means you avoid paying interest on that amount for the entire remaining term, which can add up to thousands of dollars.
Is it better to pay extra monthly or one lump sum?
Both help. Consistent monthly extra payments are easy to budget, while a lump sum applied early cuts interest fastest. The calculator models a fixed monthly extra; a lump sum to principal would save even more.
Will extra payments lower my monthly payment?
No, your required monthly payment stays the same. Instead, extra payments shorten the loan term. To lower the monthly payment you would need to refinance or recast the loan.