Loan Payoff Calculator
See how extra payments can shave years off your loan and save you thousands.
Payoff Time (without extra)
0 months
Total Interest (normal)
$0
Disclaimer: This calculator is for general educational and informational purposes only. It does not constitute financial advice, investment advice, tax advice, or legal advice and is not a substitute for consultation with a qualified professional. No fiduciary or advisory relationship is created by your use of this tool. Results are estimates based on the inputs you provide, standard mathematical formulas, and publicly available data that may not be current and may not reflect your individual financial situation, applicable tax laws, or other relevant factors. Neither MayoCalc nor Cook Media Systems assumes any liability for losses, damages, or other consequences arising from the use of any information or results provided by this tool. Always consult a qualified financial advisor, certified public accountant, or attorney before making financial decisions. See our full
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How Loan Payoff Works
Every loan has two forces at work: interest accruing on the balance and payments chipping away at it. The payoff timeline depends on the balance, interest rate, and how much you pay each month. Making only the minimum payment stretches the loan to its full term. Extra payments accelerate payoff by reducing the principal faster, which means less interest accrues each month, creating a compounding benefit.
How to Use This Calculator
Enter your current loan balance, interest rate, and monthly payment. The calculator shows your payoff date, total interest paid, and a full payment schedule. Then enter an extra monthly payment amount to see how it changes the payoff date and total interest. Even small extra payments can have a dramatic effect: $50 extra per month on a $20,000 loan at 7% saves over $2,000 in interest and pays off the loan nearly 2 years early.
Extra Payment Strategies
Biweekly payments: Instead of 12 monthly payments, make 26 half-payments (equivalent to 13 full payments per year). This adds one extra payment annually without much impact on your budget. Lump sum payments: Apply bonuses, tax refunds, or windfalls directly to principal. Round up: If your payment is $347, round up to $400. The extra $53 compounds over time. Always confirm with your lender that extra payments are applied to principal, not future interest.
Loan Payoff FAQ
Which loan should I pay off first?
The avalanche method (highest interest rate first) saves the most money. Pay minimums on all loans, then direct extra cash to the loan with the highest rate. Once that is paid off, roll its payment into the next highest rate loan. This is mathematically optimal.
Are there penalties for paying off a loan early?
Some loans have prepayment penalties, especially older mortgages and some personal loans. Federal student loans have no prepayment penalties. Check your loan agreement or call your lender. Even with a penalty, paying early can still save money if the interest savings exceed the penalty amount.