This calculator helps you understand the financial implications of a loan, including how much you'll pay each month, the total cost over time, and crucially, how making extra payments can significantly reduce the time it takes to pay off your loan and the total interest you'll owe.
The Math Behind the Calculation:
The standard loan payment formula (for calculating the fixed monthly payment M) is:
$ M = P \left[ \frac{r(1+r)^n}{(1+r)^n – 1} \right] $
n = Total number of payments (Loan term in years * 12)
When you add an extra monthly payment, the loan amortizes faster. The calculator recalculates the payoff period by essentially reducing the principal balance with each payment (original payment + extra payment) until the balance reaches zero. The time saved and interest saved are the differences between the payoff scenario with extra payments and the standard amortization schedule.
Key Metrics Explained:
Monthly Payment: The fixed amount you pay each month for the standard loan term.
Total Paid: The sum of all monthly payments (including principal and interest) over the life of the loan.
Total Interest Paid: The total amount of interest accumulated and paid over the life of the loan.
Payoff Time: The duration it takes to fully repay the loan.
Time Saved by Extra Payments: The reduction in the loan term achieved by consistently making additional payments.
Interest Saved by Extra Payments: The total interest reduction achieved by paying off the loan sooner.
Why Use This Calculator?
Understanding your loan's amortization schedule and the impact of extra payments is vital for effective financial planning. Whether it's a mortgage, auto loan, or personal loan, consistently adding even a small extra amount to your monthly payment can lead to substantial savings in interest and significantly shorten the time you remain in debt. This calculator empowers you to visualize these benefits and make informed decisions about accelerating your loan payoff.
function calculateLoan() {
var principal = parseFloat(document.getElementById("loanAmount").value);
var annualRate = parseFloat(document.getElementById("interestRate").value);
var years = parseInt(document.getElementById("loanTermYears").value);
var extraPayment = parseFloat(document.getElementById("extraPayment").value) || 0;
var monthlyRate = (annualRate / 100) / 12;
var numberOfPayments = years * 12;
var monthlyPayment = 0;
var totalPaid = 0;
var totalInterest = 0;
var payoffMonths = 0;
var payoffYears = 0;
var payoffMonthsRemainder = 0;
var timeSavedMonths = 0;
var interestSaved = 0;
// — Calculate Standard Monthly Payment —
if (monthlyRate > 0) {
monthlyPayment = principal * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
} else {
monthlyPayment = principal / numberOfPayments; // If rate is 0, payment is just principal spread out
}
// — Calculate Standard Loan Outcome —
var standardTotalPaid = monthlyPayment * numberOfPayments;
var standardTotalInterest = standardTotalPaid – principal;
// — Calculate Outcome with Extra Payments —
var remainingBalance = principal;
var currentMonth = 0;
var totalPaidWithExtra = 0;
var totalInterestWithExtra = 0;
var paymentAmount = monthlyPayment + extraPayment;
if (remainingBalance <= 0) {
payoffMonths = 0;
payoffYears = 0;
payoffMonthsRemainder = 0;
} else if (paymentAmount 0) {
// If extra payment is zero or not enough to cover calculated monthly payment, use standard calc.
// This check prevents infinite loops if inputs are weird or if extraPayment is too small.
paymentAmount = monthlyPayment; // Revert to standard payment calculation logic if extraPayment is not meaningful
remainingBalance = principal;
currentMonth = 0;
totalPaidWithExtra = 0;
totalInterestWithExtra = 0;
while(remainingBalance > 0) {
var interestThisMonth = remainingBalance * monthlyRate;
var principalThisMonth = paymentAmount – interestThisMonth;
// Ensure we don't overpay the last payment
if (principalThisMonth > remainingBalance) {
principalThisMonth = remainingBalance;
paymentAmount = principalThisMonth + interestThisMonth;
}
remainingBalance -= principalThisMonth;
totalPaidWithExtra += paymentAmount;
totalInterestWithExtra += interestThisMonth;
currentMonth++;
if (currentMonth > numberOfPayments * 5) { // Safety break for potential infinite loops
alert("Calculation error: Please check your loan details. It might be impossible to pay off with the given extra payment.");
return;
}
}
payoffMonths = currentMonth;
} else if (extraPayment > 0) { // Proceed with extra payments
while(remainingBalance > 0) {
var interestThisMonth = remainingBalance * monthlyRate;
var principalThisMonth = paymentAmount – interestThisMonth;
// Ensure we don't overpay the last payment
if (principalThisMonth > remainingBalance) {
principalThisMonth = remainingBalance;
paymentAmount = principalThisMonth + interestThisMonth;
}
remainingBalance -= principalThisMonth;
totalPaidWithExtra += paymentAmount;
totalInterestWithExtra += interestThisMonth;
currentMonth++;
if (currentMonth > numberOfPayments * 5) { // Safety break for potential infinite loops
alert("Calculation error: Please check your loan details. It might be impossible to pay off with the given extra payment.");
return;
}
}
payoffMonths = currentMonth;
} else { // No extra payment or extra payment is zero
payoffMonths = numberOfPayments;
totalPaidWithExtra = standardTotalPaid;
totalInterestWithExtra = standardTotalInterest;
}
// — Display Results —
if (isNaN(principal) || isNaN(annualRate) || isNaN(years) || principal <= 0 || annualRate < 0 || years 0 ? payoffYears + " year" + (payoffYears > 1 ? "s" : "") : "") +
(payoffMonthsRemainder > 0 ? (payoffYears > 0 ? ", " : "") + payoffMonthsRemainder + " month" + (payoffMonthsRemainder > 1 ? "s" : "") : "");
if (payoffTimeString === "") payoffTimeString = "0 months";
document.getElementById("payoffTimeResult").innerHTML = payoffTimeString;
// Calculate Total Paid and Total Interest
document.getElementById("totalPaidResult").innerHTML = "$" + totalPaidWithExtra.toFixed(2);
document.getElementById("totalInterestResult").innerHTML = "$" + totalInterestWithExtra.toFixed(2);
// Calculate Time and Interest Saved
if (extraPayment > 0 && payoffMonths 0 ? timeSavedYears + " year" + (timeSavedYears > 1 ? "s" : "") : "") +
(timeSavedMonthsRemainder > 0 ? (timeSavedYears > 0 ? ", " : "") + timeSavedMonthsRemainder + " month" + (timeSavedMonthsRemainder > 1 ? "s" : "") : "");
if (timeSavedString === "") timeSavedString = "0 months";
document.getElementById("timeSavedResult").innerHTML = timeSavedString + " ($" + interestSaved.toFixed(2) + " interest saved)";
} else {
document.getElementById("timeSavedResult").innerHTML = "No time saved (or no extra payment)";
}
}