Calculate how extra payments accelerate your loan payoff and save interest.
Your Loan Payoff Details
Original Payoff Time: Loading…
Payoff Time with Extra Payments: Loading…
Months Saved: Loading…
Total Interest Paid (Original Plan): Loading…
Total Interest Paid (With Extra Payments): Loading…
Total Interest Saved: Loading…
Understanding Loan Payoff with Extra Payments
This calculator helps you visualize the powerful impact of making extra payments on your loans. Whether it's a mortgage, car loan, student loan, or personal loan, accelerating your repayment can lead to significant savings and financial freedom.
How it Works
Loans are typically amortized, meaning each payment consists of a portion that goes towards the principal (the amount you borrowed) and a portion that goes towards interest. Early in the loan term, a larger percentage of your payment goes towards interest, and a smaller portion goes towards the principal. By making extra payments, you directly increase the principal amount being paid down. This reduces the balance on which future interest is calculated, leading to a snowball effect.
The Math Behind the Calculation
The calculator uses standard loan amortization formulas. It first determines the original loan term based on the principal, interest rate, and minimum monthly payment. Then, it recalculates the payoff time by adding the extra monthly payment to the minimum payment, effectively increasing the principal reduction each month.
Loan Amount (P): The initial sum borrowed.
Annual Interest Rate (r_annual): The yearly interest rate. This is converted to a monthly rate (r_monthly = r_annual / 100 / 12).
Monthly Payment (M): The fixed amount paid each month.
Extra Monthly Payment (E): The additional amount paid above the minimum monthly payment.
New Monthly Payment (M_new):M + E.
The number of payments (n) for a loan is typically calculated using the formula:
n = -log(1 - (P * r_monthly) / M) / log(1 + r_monthly)
This formula is applied twice: once for the original monthly payment and once for the new, increased monthly payment. The difference in the number of months (or years) represents the time saved. The total interest paid is the sum of all monthly interest accruals over the life of the loan.
Why Make Extra Payments?
Save Money on Interest: This is the most significant benefit. Over the life of a long-term loan, even small extra payments can shave thousands off your total interest costs.
Pay Off Loans Faster: Achieve debt freedom sooner, freeing up cash flow for other financial goals like investing, saving for a down payment, or retirement.
Build Equity Faster (for Mortgages): Paying down your mortgage principal quicker means building equity in your home at a faster rate.
Reduce Financial Stress: Being debt-free is a major milestone that brings peace of mind.
When to Use This Calculator:
Planning to pay off a mortgage early.
Trying to accelerate payments on a car loan or student loan.
Evaluating the impact of a debt consolidation loan.
Understanding the long-term financial benefits of disciplined extra payments.
Remember to ensure your extra payments are applied directly to the principal by notifying your lender. This calculator provides an estimate; actual results may vary slightly based on the lender's specific calculation methods and any fees.
function calculatePayoff() {
var principal = parseFloat(document.getElementById("loanAmount").value);
var annualRate = parseFloat(document.getElementById("annualInterestRate").value);
var monthlyPayment = parseFloat(document.getElementById("monthlyPayment").value);
var extraMonthlyPayment = parseFloat(document.getElementById("extraMonthlyPayment").value);
var resultDiv = document.getElementById("result");
var originalPayoffTime = document.getElementById("originalPayoffTime");
var newPayoffTime = document.getElementById("newPayoffTime");
var monthsSaved = document.getElementById("monthsSaved");
var interestPaidOriginal = document.getElementById("interestPaidOriginal");
var interestPaidNew = document.getElementById("interestPaidNew");
var interestSaved = document.getElementById("interestSaved");
// Clear previous results and set loading state
originalPayoffTime.textContent = "Original Payoff Time: Calculating…";
newPayoffTime.textContent = "Payoff Time with Extra Payments: Calculating…";
monthsSaved.textContent = "Months Saved: Calculating…";
interestPaidOriginal.textContent = "Total Interest Paid (Original Plan): Calculating…";
interestPaidNew.textContent = "Total Interest Paid (With Extra Payments): Calculating…";
interestSaved.textContent = "Total Interest Saved: Calculating…";
if (isNaN(principal) || principal <= 0 ||
isNaN(annualRate) || annualRate < 0 ||
isNaN(monthlyPayment) || monthlyPayment <= 0 ||
isNaN(extraMonthlyPayment) || extraMonthlyPayment < 0) {
resultDiv.innerHTML = "
Error
Please enter valid positive numbers for all fields.";
return;
}
var monthlyRate = annualRate / 100 / 12;
var totalInterestOriginal = 0;
var totalInterestNew = 0;
var monthsOriginal = 0;
var monthsNew = 0;
// Calculate original payoff time and interest
if (monthlyRate > 0) {
// Formula for number of payments
var denominatorOriginal = Math.log(1 + monthlyRate);
if (denominatorOriginal === 0) { // Handle case where rate is effectively 0
monthsOriginal = principal / monthlyPayment;
} else {
var numeratorOriginal = Math.log(1 – (principal * monthlyRate) / monthlyPayment);
if (numeratorOriginal > 0) { // This happens if monthly payment is too low for the rate
monthsOriginal = Infinity;
} else {
monthsOriginal = -numeratorOriginal / denominatorOriginal;
}
}
if (isFinite(monthsOriginal)) {
monthsOriginal = Math.ceil(monthsOriginal);
var remainingBalanceOriginal = principal;
for (var i = 0; i < monthsOriginal; i++) {
var interestThisMonth = remainingBalanceOriginal * monthlyRate;
var principalThisMonth = monthlyPayment – interestThisMonth;
totalInterestOriginal += interestThisMonth;
remainingBalanceOriginal -= principalThisMonth;
if (remainingBalanceOriginal 0) {
var denominatorNew = Math.log(1 + monthlyRate);
if (denominatorNew === 0) {
monthsNew = principal / newMonthlyPayment;
} else {
var numeratorNew = Math.log(1 – (principal * monthlyRate) / newMonthlyPayment);
if (numeratorNew > 0) {
monthsNew = Infinity;
} else {
monthsNew = -numeratorNew / denominatorNew;
}
}
if (isFinite(monthsNew)) {
monthsNew = Math.ceil(monthsNew);
var remainingBalanceNew = principal;
for (var i = 0; i < monthsNew; i++) {
var interestThisMonth = remainingBalanceNew * monthlyRate;
var principalThisMonth = newMonthlyPayment – interestThisMonth;
totalInterestNew += interestThisMonth;
remainingBalanceNew -= principalThisMonth;
if (remainingBalanceNew 0 ? years + (years === 1 ? " year" : " years") : "") +
(remainingMonths > 0 ? (years > 0 ? ", " : "") + remainingMonths + (remainingMonths === 1 ? " month" : " months") : (years === 0 ? "0 months" : ""));
};
var formatCurrency = function(amount) {
return "$" + amount.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
};
originalPayoffTime.textContent = "Original Payoff Time: " + formatTime(monthsOriginal);
newPayoffTime.textContent = "Payoff Time with Extra Payments: " + formatTime(monthsNew);
if (isFinite(monthsOriginal) && isFinite(monthsNew)) {
var monthsSavedVal = Math.max(0, monthsOriginal – monthsNew);
monthsSaved.textContent = "Months Saved: " + (monthsSavedVal === 0 ? "0 months" : formatTime(monthsSavedVal));
interestPaidOriginal.textContent = "Total Interest Paid (Original Plan): " + formatCurrency(totalInterestOriginal);
interestPaidNew.textContent = "Total Interest Paid (With Extra Payments): " + formatCurrency(totalInterestNew);
interestSaved.textContent = "Total Interest Saved: " + formatCurrency(Math.max(0, totalInterestOriginal – totalInterestNew));
} else if (!isFinite(monthsOriginal) && isFinite(monthsNew)) {
monthsSaved.textContent = "Months Saved: N/A (Original loan cannot be paid off with current payment)";
interestPaidOriginal.textContent = "Total Interest Paid (Original Plan): Infinite";
interestPaidNew.textContent = "Total Interest Paid (With Extra Payments): " + formatCurrency(totalInterestNew);
interestSaved.textContent = "Total Interest Saved: Infinite";
} else if (isFinite(monthsOriginal) && !isFinite(monthsNew)) {
monthsSaved.textContent = "Months Saved: N/A (Extra payment is still not enough to pay off)";
interestPaidOriginal.textContent = "Total Interest Paid (Original Plan): " + formatCurrency(totalInterestOriginal);
interestPaidNew.textContent = "Total Interest Paid (With Extra Payments): Infinite";
interestSaved.textContent = "Total Interest Saved: Negative (This scenario is unlikely with valid inputs)";
}
else { // both infinite
monthsSaved.textContent = "Months Saved: N/A";
interestPaidOriginal.textContent = "Total Interest Paid (Original Plan): Infinite";
interestPaidNew.textContent = "Total Interest Paid (With Extra Payments): Infinite";
interestSaved.textContent = "Total Interest Saved: N/A";
}
}