How extra payments work on a farm loan
The calculator keeps your normal monthly payment the same and adds your overpayments, so the loan is paid off sooner. It works month by month, charging interest at one twelfth of the annual rate on what you still owe.
Farm income is often seasonal, so a lump sum after harvest or a sale of stock can suit you better than a fixed extra amount each month. Try both to see which saves more. Some agricultural loans are repaid quarterly or yearly rather than monthly; this calculator assumes monthly payments.
Worked example
On £150,000 at 7% with 15 years left, the normal payment is £1,348.24 a month. Paying £200 a month extra saves £21,010.92 in interest and clears the loan 3 years sooner, in 12 years.
Paying £500 a month extra instead saves £38,881.84 and 5 years 9 months. A one-off £10,000 lump sum now, with no monthly extra, saves £16,943.98 and 1 year 7 months.
Before you overpay
Keep enough cash for a poor season, repairs and input costs before paying extra. Ask your lender whether overpayments are allowed and whether any early repayment charge applies.
Inputs for the farm loan calculator with extra payments
Farm loan balance
The amount left to repay on your farm loan.
Interest rate (per year)
Your current interest rate.
Time left to repay
How many years are left on the loan.
Extra each month
The amount you'll pay on top of your normal payment each month. Enter 0 for none.
One-off lump sum now
A single overpayment made now. Enter 0 for none.
CALCULATOR QUESTIONS
Farm loan calculator with extra payments questions
Can I make extra payments on a farm loan?
Often, but terms vary. Ask your lender how they apply extra payments and whether there's a charge.
How much would £200 a month extra save?
On £150,000 at 7% with 15 years left, £21,010.92 and 3 years.
Is a lump sum after harvest worth it?
It can be. In the example, £10,000 now saves £16,943.98 in interest.
Will my lender charge me for overpaying?
It depends on your agreement. Check for early repayment or settlement charges before you overpay.