Whether it is a car loan, student loan, or personal loan, adding even a little extra to each payment can dramatically shorten the term and cut the interest you pay. This calculator shows how extra payments change your payoff date and how much interest you save by paying ahead of schedule.
How extra payments help
Your regular payment is split between interest on the current balance and principal. Any amount you add on top goes entirely to principal, immediately shrinking the balance that future interest is calculated on. That creates a compounding benefit: a smaller balance means less interest next month, so more of every future payment attacks the principal too.
The math of paying ahead
The calculator recomputes your amortization schedule with the extra payment included, finds the new (earlier) payoff month, and compares total interest against the original schedule. The savings are often surprising because you are cutting off the tail end of the loan, where interest would otherwise keep accruing.
A worked example
On a $25,000 auto loan at 7% over 60 months, the payment is about $495. Add $100 a month and you pay the loan off roughly 12 months early and save several hundred dollars in interest. The higher your rate, the bigger the payoff from every extra dollar.
Before you pay extra
- Check for prepayment penalties — rare, but some loans charge a fee for paying early.
- Make sure extra payments are applied to principal, not simply advancing your next due date.
- If your loan rate is lower than what you could earn investing, weigh paying extra against investing the difference.
- Prioritize high-interest debt first if you have several loans competing for the same extra dollars.