Loan payoff calculator

Loan Payoff Calculator | Free Extra Payment Savings Tool

Loan Payoff Calculator: See What Extra Payments Save You

Even modest extra monthly payments can shave years off your loan and save thousands in interest — because every extra dollar goes straight to principal, eliminating all the future interest that dollar would have generated. Plug in your current balance, rate, and payment, then add an extra-payment amount to see how much faster you finish and how much you keep.

Quick Payoff Strategy Estimator

Compare your current trajectory to one with extra monthly payments. Result updates as you type.

Months Saved 0
Interest Saved $0
New Payoff Time: — Enter loan details to compare scenarios

I. Debt-Payoff Strategies Compared

There’s no single “right” payoff strategy — the best one is the one you’ll actually stick with. These are the four most-studied approaches.

StrategyHow It WorksBest ForTradeoff
AvalanchePay highest-interest debt firstPeople who optimize on mathSlowest psychological wins
SnowballPay smallest balance firstNeed motivation from quick winsSlightly more interest paid total
ConsolidationCombine debts into one lower-rate loanMultiple high-APR debts (CCs, etc.)Origination fees; risk of running cards back up
Biweekly PaymentsHalf-payment every 2 weeks (= 13/yr)Mortgages and auto loansSome lenders charge fees to enroll

II. Where Extra Payments Have the Biggest Impact

A $100 extra monthly payment doesn’t cut every loan equally. The higher the rate, the more dramatically you accelerate payoff and save interest.

Loan ($25k @ rate, 5-yr)Base Interest+$100/mo ExtraTime Saved
Credit Card @ 24%$17,304Saves ~$8,500~22 months
Personal Loan @ 12%$8,347Saves ~$1,800~10 months
Auto Loan @ 8%$5,415Saves ~$900~8 months
Mortgage @ 6.5%$4,360Saves ~$650~6 months

Expert Tips for Crushing Debt Faster

  • Use the Avalanche for Math, Snowball for Behavior: If you’re disciplined, attack the highest-rate debt first — it saves the most money. If you keep falling off the wagon, knock out small balances first for visible wins. The best plan is the one you finish.
  • Round Up Every Payment: Pay $1,623 instead of $1,580 — the extra $43 takes nothing out of your lifestyle but compounds into thousands in lifetime interest savings on a long mortgage.
  • Apply Windfalls Directly to Principal: Tax refund, bonus, side-gig income — route lump sums to your highest-rate debt before lifestyle inflation absorbs them. One $3k principal hit on a 20% APR balance is worth ~$3k future interest.
  • Refi Before Accelerating (When Rates Drop): Saving 1.5%+ on a mortgage refi often beats the same dollar going to extra payments. Check if a refi pencils first; pay extra after.
  • Specify “Apply to Principal”: When you make extra payments, write “principal only” on the memo or use the lender’s principal-only payment option. Otherwise some lenders apply the extra to next month’s interest, killing the acceleration effect.
  • Don’t Sacrifice Your Emergency Fund: Aggressive debt payoff with $0 saved is fragile — one car repair sends you back to credit cards. Keep at least one month’s expenses liquid before throwing extra at debt.

Methodology: The calculator runs two parallel amortization simulations — one with your current payment, one with current + extra. For each month it computes interest = balance × (rate/12), then subtracts payment − interest from the balance until the balance hits zero. Months saved = baseline months − accelerated months. Interest saved = baseline total interest − accelerated total interest. Caps simulation at 50 years (600 months) as a safety; if your payment is below the interest charge the loan never amortizes (negative amortization) and the calculator flags this.

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