Repayment Calculator — Free Online Loan Payoff Tool

How to Use the Repayment Calculator

This calculator compares your current loan payoff plan against an accelerated plan with extra monthly payments. It shows you exactly how much time and money you save by paying more than the minimum. Here is how to use each input for an accurate comparison.

1. Enter your loan balance. Input the current remaining principal balance on your loan, not the original loan amount. You can find this on your latest statement or by checking your online account. If you have just taken out the loan, enter the full original amount. For the most accurate results, use the exact payoff balance from your lender, which may differ slightly from the statement balance due to accrued interest.
2. Set the annual interest rate. Enter the APR from your loan statement. For a fixed-rate loan, this rate stays constant. For a variable-rate loan, use the current rate as an estimate, understanding that future rate changes will affect the actual results. The rate has a significant impact on how much you save with extra payments; higher rates mean greater savings from paying early.
3. Choose the remaining term. Select the number of months remaining on your loan. If your loan has 4 years and 6 months remaining, choose 54 months (round to the nearest available option). This determines the baseline payoff schedule against which extra payments are compared. A longer remaining term means more potential savings from extra payments.
4. Enter your extra monthly payment. Input the additional amount you plan to pay above your required minimum payment each month. Even small amounts make a difference. Start with what you can comfortably afford, then try higher amounts to see the incremental impact. The calculator shows the baseline monthly payment (without extra) and the new total monthly payment (with extra) for comparison.
5. Review your savings. The results panel compares the original plan against the accelerated plan side-by-side. You see the original term versus the new payoff term, original total interest versus new total interest, total interest saved, total months saved, and the estimated payoff date. The pie chart illustrates the difference in interest cost between the two scenarios, with the saved interest shown as a separate slice.

Experiment with different extra payment amounts to find the sweet spot between aggressive payoff and maintaining comfortable cash reserves. Even $50 per month extra can save hundreds in interest and shave months off your loan.

Repayment Formula with Extra Payments

The repayment calculation simulates the loan month by month, applying the extra payment directly to the principal balance after the regular interest charge. This iterative approach accurately captures the compounding benefit of reducing the principal early.

Where:

• P = Original loan principal
• r = Monthly interest rate (annual rate ÷ 12 ÷ 100)
• n = Original loan term in months
• Extra = Additional monthly payment applied directly to principal

Worked Example

Calculate the impact of $200/month extra on a $30,000 loan at 7.5% over 60 months:

1. Base monthly payment: $601.27
2. Total payment with extra: $601.27 + $200 = $801.27
3. Month 1 interest: $30,000 × (7.5% ÷ 12) = $187.50
4. Month 1 principal paid: $801.27 − $187.50 = $613.77
5. Month 1 new balance: $30,000 − $613.77 = $29,386.23
6. Without extra (month 1): $601.27 − $187.50 = $413.77 principal (balance = $29,586.23)
7. Result: Original payoff: 60 months, $6,076 total interest
8. Accelerated payoff: 43 months, $3,255 total interest
9. Savings: 17 months and $2,821 in interest

In the first month alone, the extra $200 reduces the principal by an additional $200, which saves $1.25 in interest the following month ($200 × 0.625%). This savings compounds every month because the lower balance generates less interest, allowing more of each subsequent payment to go toward principal.

Practical Repayment Examples

These scenarios illustrate the real impact of extra payments across different loan types and payment strategies in 2026.

Auto Loan Early Payoff

Luis has a $22,000 auto loan at 6.5% with 48 months remaining and a $523/month payment. He received a $2,000 annual raise and decides to put $150/month toward extra payments. His new total payment is $673/month. Without extra payments, he pays $3,098 in total interest over 48 months. With $150/month extra, he pays off the loan in 38 months instead of 48, saving $668 in interest and 10 months of payments. The 10 months of skipped payments ($523 × 10 = $5,230) can go into savings once the loan is paid off, accelerating his financial goals.

Student Loan Payoff Strategy

Mei graduated with $40,000 in student loans at 5.5% over 120 months. Her base payment is $434/month. She picks up freelance work earning about $500/month and puts $300 toward extra loan payments. With $300/month extra ($734 total), payoff drops from 120 months to 65 months (nearly cut in half) and total interest drops from $12,050 to $6,250, saving $5,800. After payoff in just over 5 years, Mei redirects the full $734/month into her investment account. Had she kept the standard 10-year plan and invested $300/month instead, her net financial position would be roughly similar, but she prefers the psychological freedom of being debt-free sooner.

Aggressive vs. Moderate Extra Payments

Carlos has a $30,000 personal loan at 8.0% over 60 months (base payment $608). He is considering three strategies: no extra payments (baseline), $100/month extra, or $300/month extra. Baseline: 60 months, $6,498 interest. With $100 extra ($708/month): 50 months, $5,077 interest (saves 10 months, $1,421). With $300 extra ($908/month): 38 months, $3,520 interest (saves 22 months, $2,978). The $300 strategy saves double the interest and double the time compared to the $100 strategy. Carlos chooses the moderate $100 option because it preserves cash for his emergency fund, with plans to increase to $300 once his emergency fund reaches 6 months of expenses.

Combining Lump Sum and Monthly Extra

Natasha has a $25,000 loan at 7.5% with 60 months remaining ($501/month payment). She applies her $3,000 tax refund as a lump sum in month 6, then adds $100/month extra starting in month 7. The lump sum immediately reduces the balance from approximately $22,400 to $19,400 in month 6. Combined with $100/month extra for the remaining months, her total payoff time drops from 60 months to approximately 42 months, saving 18 months and about $2,600 in interest. This combined strategy is more effective than either approach alone because the lump sum creates an immediate balance reduction that amplifies the benefit of subsequent monthly extra payments.

Repayment Tips and Complete Guide

Paying off debt faster is one of the most impactful financial moves you can make. These strategies help you maximize the benefit of extra payments while maintaining financial stability.

Start with an Emergency Fund

Before directing all extra cash toward loan repayment, establish an emergency fund of at least $1,000 (ideally 3-6 months of expenses). Without an emergency fund, an unexpected expense could force you to take on new debt (often at higher rates), undoing your repayment progress. Once you have a minimum buffer, split your extra cash between the emergency fund and extra loan payments until the fund reaches your target level, then redirect everything to the loan.

Use Found Money for Extra Payments

Tax refunds, work bonuses, gift money, side hustle income, and savings from canceled subscriptions are all sources of "found money" that can go toward extra loan payments without affecting your regular budget. A $3,000 tax refund applied as a lump sum to a $30,000 loan at 7.5% saves approximately $600-900 in interest depending on when it is applied. Automate the process by setting up a separate savings account for found money, then making quarterly lump-sum principal payments.

Automate Your Extra Payments

The easiest way to ensure consistent extra payments is to automate them. Set up an automatic transfer for the extra amount on payday, before you have a chance to spend it. Most lenders allow you to schedule additional principal payments alongside your regular payment. If your lender does not support automated extra payments, set up a recurring bank transfer on the same day as your loan payment. Consistency matters more than amount; $100/month every month beats $300 one month and nothing the next three.

The Debt Avalanche vs. Snowball Decision

If you have multiple loans, the avalanche method (pay highest rate first) saves the most money, while the snowball method (pay smallest balance first) provides faster psychological wins. Both methods require making minimum payments on all loans while directing extra money to one target loan. The mathematical difference between the two methods is usually small (5-15% of total interest saved), so choose the method that keeps you motivated. Once your target loan is paid off, redirect that entire payment to the next loan, creating a snowball effect of increasingly large payments.

Common Mistakes to Avoid

• Not verifying how your lender applies extra payments. Some lenders apply extra payments to future monthly payments (advancing your due date) rather than reducing the principal balance. Always confirm with your lender that extra payments are applied to the principal. If they are not, you lose the compounding interest savings that make extra payments valuable.
• Draining all savings to pay off a loan. While being debt-free is a worthy goal, paying off a 6% loan by emptying your emergency fund leaves you vulnerable to higher-rate debt (credit cards at 20%+) if an emergency occurs. Maintain a reasonable cash buffer even while aggressively paying down debt.
• Paying extra on low-rate debt while carrying high-rate debt. If you have a 4% auto loan and 18% credit card debt, every extra dollar should go to the credit card first. The interest savings from paying off high-rate debt are much greater. Only focus on lower-rate loans after high-rate obligations are eliminated.
• Ignoring prepayment penalties. Some loans charge a fee for early payoff. Check your loan agreement before making large extra payments. If the penalty exists, calculate whether the interest savings exceed the penalty cost. In most cases, the savings still outweigh the penalty, especially for high-rate or long-term loans.
• Making irregular extra payments instead of consistent ones. Sporadic large payments are less effective than consistent smaller ones because the balance reduction is not sustained. A $200/month extra payment reduces the balance by $2,400 per year with continuous interest savings, while a single $2,400 payment at year-end misses 11 months of potential savings on the earlier reductions.