Enter your loan details to see your potential savings.
Understanding Personal Loan Early Payoff and Savings
Paying off a personal loan early can significantly reduce the total amount of interest you pay over the life of the loan and shorten the repayment period. This calculator helps you estimate the potential savings and the time saved by making extra payments towards your loan.
How it Works: The Math Behind the Savings
Personal loans typically have a fixed interest rate and a set repayment term. When you make more than the minimum monthly payment, the additional amount is applied directly to the principal balance. Reducing the principal faster means less interest accrues over time.
This calculator uses a loan amortization process to simulate the loan's repayment with and without extra payments.
Original Loan Amount: The initial sum borrowed.
Current Loan Balance: The amount still owed on the loan.
Annual Interest Rate: The yearly cost of borrowing, expressed as a percentage. This is converted to a monthly rate for calculations (Annual Rate / 12).
Current Monthly Payment: The standard payment required each month.
Extra Monthly Payment: The additional amount you plan to pay each month towards the principal.
Key Calculations:
The calculator estimates the following:
Time to Pay Off (Without Extra Payments): Based on the current balance, monthly payment, and interest rate, it calculates how many months it would take to pay off the loan if only the minimum payment is made.
Time to Pay Off (With Extra Payments): It calculates the new payoff time when the extra payment is added to the monthly payment.
Total Interest Paid (Without Extra Payments): The sum of all interest paid over the loan's life at the original payment schedule.
Total Interest Paid (With Extra Payments): The sum of all interest paid when making additional payments.
Total Interest Saved: The difference between the interest paid without extra payments and the interest paid with extra payments.
Time Saved: The difference in months between the two payoff scenarios.
When to Use This Calculator:
This calculator is useful for anyone with a personal loan who is considering:
Making a lump-sum payment.
Increasing their regular monthly payments.
Budgeting for debt reduction.
Understanding the financial benefit of becoming debt-free sooner.
By visualizing the impact of your extra payments, you can make informed decisions about your personal finances and accelerate your journey towards financial freedom.
function calculateEarlyPayoff() {
var originalLoanAmount = parseFloat(document.getElementById("originalLoanAmount").value);
var currentLoanBalance = parseFloat(document.getElementById("currentLoanBalance").value);
var annualInterestRate = parseFloat(document.getElementById("annualInterestRate").value);
var monthlyPayment = parseFloat(document.getElementById("monthlyPayment").value);
var extraPayment = parseFloat(document.getElementById("extraPayment").value);
var resultDiv = document.getElementById("result");
// Input validation
if (isNaN(originalLoanAmount) || isNaN(currentLoanBalance) || isNaN(annualInterestRate) || isNaN(monthlyPayment) || isNaN(extraPayment) ||
originalLoanAmount <= 0 || currentLoanBalance <= 0 || annualInterestRate < 0 || monthlyPayment <= 0 || extraPayment originalLoanAmount) {
resultDiv.innerHTML = "Current loan balance cannot be greater than the original loan amount.";
return;
}
var monthlyInterestRate = annualInterestRate / 100 / 12;
var totalPaymentWithExtra = monthlyPayment + extraPayment;
// — Calculate payoff without extra payments —
var monthsWithoutExtra = 0;
var remainingBalanceWithout = currentLoanBalance;
var totalInterestPaidWithout = 0;
while (remainingBalanceWithout > 0) {
var interestThisMonth = remainingBalanceWithout * monthlyInterestRate;
var principalThisMonth = monthlyPayment – interestThisMonth;
if (principalThisMonth 5000) { // Prevent infinite loops for edge cases
resultDiv.innerHTML = "Calculation exceeded maximum iterations without extra payment. Check loan details.";
return;
}
}
// Ensure remaining balance isn't negative due to rounding
if (remainingBalanceWithout 0) {
var interestThisMonth = remainingBalanceWith * monthlyInterestRate;
var principalThisMonth = totalPaymentWithExtra – interestThisMonth;
if (principalThisMonth 5000) { // Prevent infinite loops
resultDiv.innerHTML = "Calculation exceeded maximum iterations with extra payment. Check loan details.";
return;
}
}
// Ensure remaining balance isn't negative due to rounding
if (remainingBalanceWith < 0) {
totalInterestPaidWith += remainingBalanceWith; // Adjust interest by the overshoot
}
var totalInterestSaved = totalInterestPaidWithout – totalInterestPaidWith;
var timeSavedMonths = monthsWithoutExtra – monthsWithExtra;
var timeSavedYears = Math.floor(timeSavedMonths / 12);
var timeSavedRemainingMonths = timeSavedMonths % 12;
var outputHTML = "You could save approximately $" + totalInterestSaved.toFixed(2) + " in interest.";
outputHTML += "You could pay off your loan " + timeSavedMonths + " months sooner ";
if (timeSavedYears > 0) {
outputHTML += "(" + timeSavedYears + " year" + (timeSavedYears > 1 ? "s" : "") + (timeSavedRemainingMonths > 0 ? " and " + timeSavedRemainingMonths + " month" + (timeSavedRemainingMonths > 1 ? "s" : "") : "") + ")";
} else if (timeSavedRemainingMonths > 0) {
outputHTML += "(" + timeSavedRemainingMonths + " month" + (timeSavedRemainingMonths > 1 ? "s" : "") + ")";
}
outputHTML += ".";
resultDiv.innerHTML = outputHTML;
}