Loan Payoff Calculator
Calculate how long to pay off your loan and how extra payments save interest.
About this calculator
The Loan Payoff Calculator answers one question: how much sooner will I be debt-free, and how much interest will I save, if I add a little extra to my monthly payment? It compares your current payment with the payment plus an extra amount and shows the months saved and the interest saved side by side.
Enter your current balance, the annual interest rate, your regular monthly payment and the extra amount you could add. The tool simulates the loan month by month in both cases. It works for credit cards, car loans, personal loans and any other balance that compounds monthly. If your payment is not larger than the monthly interest, the balance would never fall, and the tool warns you.
How to use it
- Enter your Current Balance.
- Enter the Annual Interest Rate.
- Enter your Monthly Payment.
- Enter an Extra Monthly Payment you could afford.
- Press Calculate and compare months and interest with and without the extra payment.
Tips and common mistakes
- On high-rate debt such as credit cards, even a small extra payment saves a lot, because the rate is so high.
- If you have several debts, put extra money on the highest-rate one first (the avalanche method) or the smallest balance first (snowball).
- Do not extend the extra payment for only a few months and expect the full saving. The effect comes from keeping it up.
- Check that the lender applies extra money to principal, not to future instalments.
Frequently asked questions
How does an extra payment save so much interest?
The extra amount goes straight to principal, so next month's interest is charged on a smaller balance. The saving compounds over the remaining months.
What if my payment is smaller than the monthly interest?
The balance never falls. Increase the payment above the monthly interest, which is balance × rate ÷ 12.
Does this work for credit cards?
Yes, if you stop adding new charges. Use the card's annual percentage rate and your planned monthly payment.
Is the interest figure exact?
It assumes interest is charged monthly on the opening balance. Lenders that charge daily interest differ slightly.
Should I pay extra or invest instead?
If your debt rate is higher than the return you can reliably earn after tax, paying the debt gives a guaranteed return equal to the rate. Many people keep an emergency fund first and then pay off high-rate debt.
Why does the final payment look different?
The last payment is usually smaller because only the remaining balance is due.