Loans
Extra Payment Loan Calculator
See exactly how much interest you save and how many months you cut off your loan by adding extra monthly payments or a one-time lump sum.
Loan Details
Extra Payments
🔒 All calculations happen instantly in your browser. No data is sent to any server.
How the calculation works
Each month, interest accrues on the remaining balance. Any extra payment reduces principal directly, so less interest accrues in every subsequent month — the savings compound over time.
Interest Reduction = (Interest without extra payments) − (Interest with extra payments)
Example: $300,000 at 6.5% over 30 years. Base payment = $1,896/mo · Total interest = $382,633
Adding $200/month extra → paid off in 24y 5m · Total interest = $294,878 → Save $87,755 and 5.5 years
Frequently Asked Questions
- No — with most standard loans, extra payments reduce principal and shorten the term, but your required monthly payment stays the same. Some lenders let you recast the loan to lower payments, but that requires a formal request.
- Earlier is always better — the earlier you reduce principal, the more interest accrues on a smaller balance for longer. A $10,000 lump sum in month 1 saves far more interest than the same payment in year 20.
- Most do — but verify. Some lenders apply extra funds to future scheduled payments first (prepaid interest), which doesn't reduce principal. Specify 'apply to principal' when making the payment and check your next statement.
- Even $50–100 extra per month makes a meaningful difference over a long loan term. On a 30-year mortgage, $100/month extra typically saves 4–5 years and tens of thousands in interest.
- It depends on the loan rate vs. expected investment returns. If your mortgage is 7% and your investment return expectation is 7%, they're roughly equivalent on a risk-adjusted basis. Higher-rate debt (credit cards at 20%+) should almost always be paid first.