See how much time and interest you can save by making extra monthly payments on your personal loan.
Time Saved:
Total Interest Saved:
New Payoff Period:
Original Remaining Months:
How Does Early Loan Payoff Work?
When you take out a personal loan, your monthly payment is split between two things: principal (the actual money you borrowed) and interest (the cost of borrowing). In the early stages of a loan, a larger portion of your payment goes toward interest.
By making an extra monthly payment, you are effectively reducing the principal balance faster. Since interest is calculated based on the remaining principal, a lower balance means less interest accumulates every month. This creates a "snowball effect" that shortens your loan term significantly.
Example Calculation
Imagine you have a $10,000 loan at a 12% interest rate with a monthly payment of $332 (roughly a 3-year term). If you add just $100 extra each month:
You will pay off the loan 11 months sooner.
You will save approximately $580 in interest charges.
Your total loan term drops from 36 months to 25 months.
Strategies for Faster Debt Reduction
If you want to maximize the results shown in this calculator, consider these three strategies:
The Round-Up Method: If your payment is $332, pay $400. That small $68 difference barely impacts your daily life but slashes months off your debt.
Bi-Weekly Payments: Split your monthly payment in half and pay every two weeks. You'll end up making 13 full payments a year instead of 12.
Lump Sum Contributions: Use tax refunds or work bonuses to make a one-time principal-only payment to drastically reduce the interest base.
function calculateEarlyPayoff() {
var balance = parseFloat(document.getElementById('loanBalance').value);
var annualRate = parseFloat(document.getElementById('interestRate').value);
var monthlyPayment = parseFloat(document.getElementById('monthlyPayment').value);
var extraPayment = parseFloat(document.getElementById('extraPayment').value);
if (isNaN(balance) || isNaN(annualRate) || isNaN(monthlyPayment) || balance <= 0) {
alert("Please enter valid positive numbers for balance, rate, and payment.");
return;
}
var monthlyRate = (annualRate / 100) / 12;
// Check if payment covers interest
if (monthlyPayment 0 ? savings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) : "0.00");
document.getElementById('newTerm').innerHTML = Math.ceil(nNew) + " months";
document.getElementById('oldTerm').innerHTML = Math.ceil(nOriginal) + " months";
}