How extra payments pay a loan off faster
Each month's interest is charged on the balance you still owe. An extra payment applied to principal lowers that balance straight away, so later interest charges are smaller and more of each regular payment goes to principal. Keeping the same payment, you reach a zero balance sooner.
US lenders apply the yearly interest rate monthly at one twelfth of the rate, so 11% a year is 0.9167% a month. Use the note rate from your loan agreement or statement, not the APR, if you paid fees when you took the loan out.
Worked example
You owe $15,000 at 11% with 4 years left, so the regular payment is $387.68 and the interest still to pay is $3,608.78. Paying $100 extra each month pays the loan off in 3 years and 1 month, 11 months early, and saves $906.72 of interest. If the next payment is due December 1, 2026, the payoff date moves from November 1, 2030 to December 1, 2029.
Before you pay extra
Ask your lender to apply extra money to principal. Some lenders treat an extra payment as an early installment and push back your next due date instead, which saves less interest.
Most US personal loans have no prepayment penalty, but check your contract, especially on older, subprime or secured vehicle loans. Federal credit unions can't charge one.
To pay the whole loan off now, including daily interest and any penalty, use the US loan prepayment penalty calculator to estimate your payoff amount.
What this calculator assumes
The rate is fixed, the one-time payment is made now and the monthly extra goes with every regular payment. Interest is worked out monthly; loans that accrue simple interest daily can differ by a few cents depending on when payments arrive.
It doesn't include fees, late charges or a prepayment penalty.
Borrowing in the UK?
The country choices above the inputs open separate local pages. UK lenders quote the APR as an effective annual rate and UK law sets the early repayment rules. Choosing United Kingdom opens that page and resets the inputs; amounts are not converted.
For a loan from a UK lender, use the UK loan overpayment calculator in pounds.
Inputs for the US loan payoff calculator
Amount you owe
Your current principal balance in US dollars, from your statement or online account.
Interest rate
The yearly note rate on your loan. The rate shown is only an example.
Time left to repay
How long is left on the loan in years. Part-years are fine if they come to whole months, such as 2.5 years for 30 payments.
Extra each month
The extra amount you'd pay with every regular payment. Enter 0 to see a one-time payment on its own.
One-off lump sum now
A single extra payment you make today. It must be less than what you owe; to pay the loan off, use the prepayment penalty calculator.
Next payment date
When your next regular payment is due. The calculator counts on a month at a time to date your final payment, with and without extra payments.
CALCULATOR QUESTIONS
US loan payoff calculator questions
How much does an extra $100 a month save?
It depends on your balance, rate and time left. On $15,000 at 11% with 4 years left it saves $906.72 and 11 months; enter your own numbers to see yours.
Is a one-time payment or extra monthly payments better?
Money that comes off the balance sooner saves more interest, so a one-time payment now usually beats the same total spread over many months.
Will paying extra lower my monthly payment?
Usually not. Most lenders keep your payment the same and the loan ends sooner, which is what this calculator shows.
Does paying off a loan early hurt my credit?
It can cause a small, temporary dip because a closed account no longer adds to your active credit mix, but paying on time and owing less generally help over time.