Loan Payoff Calculator

Find out when your loan will be paid off and how much interest extra monthly payments can save.

How the loan payoff calculator works

Each month, your loan accrues interest on the remaining balance; whatever your payment covers beyond that interest reduces the principal. The calculator simulates this month by month — including the smaller final payment — to find exactly when the balance hits zero and how much interest you pay along the way.

It runs the simulation twice: once with your current payment and once with your extra payment added. Because the extra amount goes entirely to principal, it shrinks the base that future interest is charged on, which is why modest extra payments can remove years from a loan.

One important edge case: if your payment is less than or equal to the first month’s interest, the balance never shrinks — the loan mathematically never pays off. The calculator flags this instead of showing a misleading date.

How to use this calculator

Enter your current loan balance.
Enter the annual interest rate on the loan.
Enter your regular monthly payment.
Optionally add an extra monthly amount to compare scenarios.
Press Calculate to see your debt-free date, time saved, and interest saved.

Key terms

Payoff date: The month your balance reaches zero at the given payment.
Principal prepayment: Any amount paid beyond required interest and scheduled principal — it directly reduces the balance future interest is charged on.
Minimum-payment trap: When a payment barely exceeds (or fails to cover) monthly interest, so the balance shrinks very slowly or grows.

Tips

Confirm your lender applies extra amounts to principal, not to next month’s payment — the wording matters.
Rounding your payment up to a clean number is an effortless form of extra payment.
Prioritize extra payments on your highest-rate debt first (the avalanche method) to maximize interest saved.

Frequently asked questions

Why does the calculator say my loan never pays off?

If your monthly payment is less than or equal to the interest that accrues each month, nothing is left to reduce the principal, so the balance never falls. Increase the payment above the monthly interest charge — even slightly — and a payoff date appears.

How much does an extra $100 per month actually help?

It depends on the rate and balance, but on a $20,000 loan at 7% with a $400 payment, an extra $100 removes roughly a year and several hundred dollars of interest. Run your own numbers — the side-by-side chart shows both timelines.

Is it better to make one big extra payment or small monthly ones?

Dollar for dollar, earlier is better because principal reduced today stops accruing interest immediately. A lump sum now beats the same total spread over the year, but consistent monthly extras are usually easier to sustain.

Planning further? Try the mortgage calculator or the debt-to-income ratio calculator.

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