Calculate how long it will take to pay off your loan by making extra payments.
Your Payoff Details
Estimated Time to Pay Off:
—
Total Interest Paid: —
Understanding the Loan Payoff Calculator
This Loan Payoff Calculator is a powerful tool designed to help you understand the impact of making extra payments on your loans. By inputting your current loan details, you can visualize how accelerating your repayment schedule can save you money on interest and shorten the time it takes to become debt-free.
How It Works: The Math Behind the Calculation
The calculator determines the loan payoff time by simulating monthly payments. It takes into account your current loan balance, the annual interest rate, your minimum monthly payment, and any additional amount you plan to pay each month. The core of the calculation involves iterating through each month, applying the interest accrued, and then subtracting the total payment (minimum + extra).
The interest is calculated on the remaining balance for that month. The monthly interest rate is derived from the annual rate by dividing it by 12. The formula used to calculate the interest for a given month is:
After calculating the interest, it's added to the balance. Then, the total monthly payment (minimum + extra) is subtracted from this new balance. This process repeats month after month until the loan balance reaches zero or less.
The total interest paid is the sum of all the monthly interest amounts calculated throughout the repayment period.
This iterative process allows us to accurately estimate the number of months and, consequently, the years and months required to fully pay off the loan, as well as the total interest savings.
Key Inputs Explained:
Current Loan Balance ($): The principal amount you currently owe on the loan.
Annual Interest Rate (%): The yearly interest rate charged by the lender. This is converted to a monthly rate for calculations.
Current Minimum Monthly Payment ($): The fixed amount you are required to pay each month as per your loan agreement.
Extra Monthly Payment ($): Any additional amount you choose to pay above your minimum monthly payment. This is the key variable for accelerating payoff.
Why Use a Loan Payoff Calculator?
Debt Reduction Strategy: Helps visualize the benefits of making extra payments. Even small additional amounts can significantly shorten loan terms.
Financial Planning: Aids in budgeting and setting realistic goals for becoming debt-free.
Interest Savings: Quantifies the amount of money you can save on interest charges over the life of the loan.
Comparison Tool: Allows you to compare different extra payment scenarios to find the most effective strategy for your financial situation.
By understanding these calculations and using the tool, you can make more informed financial decisions and take control of your debt.
function calculatePayoff() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var minimumPayment = parseFloat(document.getElementById("minimumPayment").value);
var extraPayment = parseFloat(document.getElementById("extraPayment").value);
var resultDiv = document.getElementById("result");
var totalInterestPaidDiv = document.getElementById("totalInterestPaid");
// Clear previous results
resultDiv.textContent = "–";
totalInterestPaidDiv.textContent = "Total Interest Paid: –";
// Input validation
if (isNaN(loanAmount) || loanAmount <= 0) {
alert("Please enter a valid current loan balance.");
return;
}
if (isNaN(interestRate) || interestRate < 0) {
alert("Please enter a valid annual interest rate.");
return;
}
if (isNaN(minimumPayment) || minimumPayment <= 0) {
alert("Please enter a valid minimum monthly payment.");
return;
}
if (isNaN(extraPayment) || extraPayment < 0) {
alert("Please enter a valid extra monthly payment (can be 0).");
return;
}
var monthlyInterestRate = (interestRate / 100) / 12;
var totalMonthlyPayment = minimumPayment + extraPayment;
var balance = loanAmount;
var months = 0;
var totalInterest = 0;
// Check if total monthly payment is enough to cover at least the interest on the first month
var firstMonthInterest = balance * monthlyInterestRate;
if (totalMonthlyPayment 0) {
alert("Your total monthly payment (minimum + extra) is not enough to cover the interest on the first month. Please increase your payment.");
return;
}
while (balance > 0) {
// Calculate interest for the current month
var interestForMonth = balance * monthlyInterestRate;
// Ensure interest doesn't exceed balance if payment is very small
if (interestForMonth > balance) {
interestForMonth = balance;
}
totalInterest += interestForMonth;
// Determine payment amount for the month
var paymentThisMonth = totalMonthlyPayment;
// If the remaining balance plus interest is less than the total monthly payment,
// pay only the remaining balance plus interest.
if (balance + interestForMonth < totalMonthlyPayment) {
paymentThisMonth = balance + interestForMonth;
}
balance -= paymentThisMonth;
balance += interestForMonth; // Add interest back to balance before next calculation
// Ensure balance doesn't go negative due to floating point inaccuracies
if (balance 10000) {
alert("Calculation exceeded maximum iterations. Please check your input values.");
return;
}
}
var years = Math.floor(months / 12);
var remainingMonths = months % 12;
var timeString = "";
if (years > 0) {
timeString += years + (years === 1 ? " year" : " years");
if (remainingMonths > 0) {
timeString += ", ";
}
}
if (remainingMonths > 0) {
timeString += remainingMonths + (remainingMonths === 1 ? " month" : " months");
}
if (timeString === "") { // Handles case where balance was already 0 or very close
timeString = "0 months";
}
resultDiv.textContent = timeString;
totalInterestPaidDiv.textContent = "Total Interest Paid: $" + totalInterest.toFixed(2);
}