Additional Payment Loan Calculator
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Additional Payment Loan Calculator
Your Results
—
Enter your loan details above to see the impact of extra payments.
Understanding Additional Payments on Loans
Paying more than your minimum monthly loan payment can have a significant impact on the total interest paid and the life of your loan. This calculator helps you visualize the benefits of making additional payments on your mortgage, auto loan, personal loan, or any amortizing debt.
How Additional Payments Work
When you make a payment on an amortizing loan (like a mortgage or auto loan), your payment is first applied to any outstanding interest that has accrued since your last payment, and then the remainder is applied to the principal balance. By adding an extra amount to your regular payment, you are directly increasing the portion that goes towards the principal. Reducing the principal balance faster has a compounding effect:
- Less Interest Accrued: A lower principal balance means less interest will accrue in the future.
- Shorter Loan Term: By reducing the principal faster, you pay off the loan in fewer months.
- Significant Savings: Over the life of the loan, these extra payments can save you thousands of dollars in interest.
The Math Behind the Calculator
This calculator works by first determining your current standard monthly payment, then recalculating the loan payoff time and total interest paid with the added monthly contribution. The core formula for calculating the standard monthly payment (M) of an amortizing loan is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
- M = Monthly Payment
- P = Principal Loan Amount
- i = Monthly Interest Rate (Annual Rate / 12)
- n = Total Number of Payments (Loan Term in Months)
Once the standard monthly payment is calculated, the calculator simulates the loan amortization with the increased payment (standard payment + additional payment). It iteratively reduces the principal balance month by month, accounting for accrued interest, until the balance reaches zero. The time taken for this process with the additional payment is then compared to the original remaining term.
When to Use This Calculator
- Mortgages: Aggressively paying down your mortgage can free up cash flow sooner and save substantial interest over 15-30 years.
- Auto Loans: Paying off your car loan faster can help you avoid paying a lot of interest, especially on longer-term loans.
- Personal Loans: If you have high-interest personal loans, extra payments can be a powerful tool to reduce debt quickly.
- Debt Snowball/Avalanche: This calculator is useful for determining the impact of extra payments within these debt reduction strategies.
By inputting your current loan details, you can gain a clear understanding of how making even modest extra payments can accelerate your debt freedom and save you money.
function calculateLoanPayoff() {
var principal = parseFloat(document.getElementById("principal").value);
var annualInterestRate = parseFloat(document.getElementById("annualInterestRate").value);
var remainingTermMonths = parseInt(document.getElementById("remainingTermMonths").value);
var additionalPayment = parseFloat(document.getElementById("additionalPayment").value);
var resultDiv = document.getElementById("result");
if (isNaN(principal) || isNaN(annualInterestRate) || isNaN(remainingTermMonths) || isNaN(additionalPayment)) {
resultDiv.innerHTML = "Please enter valid numbers for all fields.";
return;
}
if (principal <= 0 || annualInterestRate < 0 || remainingTermMonths <= 0 || additionalPayment 0) {
standardMonthlyPayment = principal * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, remainingTermMonths)) / (Math.pow(1 + monthlyInterestRate, remainingTermMonths) – 1);
} else {
standardMonthlyPayment = principal / remainingTermMonths;
}
// — Simulate Original Loan Payoff —
var currentBalanceOriginal = principal;
var tempMonthsOriginal = 0;
var tempTotalInterestOriginal = 0;
while (currentBalanceOriginal > 0 && tempMonthsOriginal < 5000) { // Safety break for extreme cases
var interestPayment = currentBalanceOriginal * monthlyInterestRate;
var principalPayment = standardMonthlyPayment – interestPayment;
if (principalPayment < 0) principalPayment = currentBalanceOriginal; // Handle final payment adjustment
if (currentBalanceOriginal – principalPayment interestPayment) {
// Ensure we don't overpay due to final payment logic if standard payment is very high
principalPayment = standardMonthlyPayment – interestPayment;
} else {
principalPayment = currentBalanceOriginal; // Pay off remaining balance
}
}
tempTotalInterestOriginal += interestPayment;
currentBalanceOriginal -= principalPayment;
tempMonthsOriginal++;
if (currentBalanceOriginal 0 && tempMonthsWithExtra < 5000) { // Safety break
var interestPayment = currentBalanceWithExtra * monthlyInterestRate;
var principalPayment = totalPaymentWithExtra – interestPayment;
if (principalPayment < 0) principalPayment = currentBalanceWithExtra; // Handle final payment adjustment
if (currentBalanceWithExtra – principalPayment interestPayment) {
// Ensure we don't overpay due to final payment logic if total payment is very high
principalPayment = totalPaymentWithExtra – interestPayment;
} else {
principalPayment = currentBalanceWithExtra; // Pay off remaining balance
}
}
tempTotalInterestWithExtra += interestPayment;
currentBalanceWithExtra -= principalPayment;
tempMonthsWithExtra++;
if (currentBalanceWithExtra < 0.005) { // Ensure we stop if balance is effectively zero
currentBalanceWithExtra = 0;
break;
}
}
monthsToPayOffWithExtra = tempMonthsWithExtra;
totalInterestPaidWithExtra = tempTotalInterestWithExtra;
var savings = totalInterestPaidOriginal – totalInterestPaidWithExtra;
var timeSaved = remainingTermMonths – monthsToPayOffWithExtra;
if (isNaN(savings)) savings = 0;
if (isNaN(timeSaved)) timeSaved = 0;
var resultHTML = `
With your additional payment, you could save approximately
$${savings.toFixed(2)} in interest.
Your loan could be paid off up to
${timeSaved} months sooner!
Total interest paid (original plan): $${totalInterestPaidOriginal.toFixed(2)}
Total interest paid (with extra payments): $${totalInterestPaidWithExtra.toFixed(2)}
Original estimated payoff: ${remainingTermMonths} months
Estimated payoff with extra payments: ${monthsToPayOffWithExtra} months
`;
resultDiv.innerHTML = resultHTML;
}