How to use this calculator
- Enter the loan amount, interest rate, term, and start month.
- Optionally set a fixed regular payment override.
- Add extra monthly, annual, or one-time principal payments.
- Press calculate to view payoff dates, savings, and schedules.
- Switch schedule view, then export CSV or PDF.
Formula used
The minimum monthly payment for a fixed-rate amortizing loan is: PMT = P × r ÷ (1 − (1 + r)−n), where P is principal, r is monthly rate, and n is total months.
Each month: Interest = Balance × r, Principal = Payment − Interest, and the ending balance is reduced by principal plus any extra payments.
Extra payments are applied to principal only, which reduces future interest because interest is computed on the remaining balance.
Example data table
| Scenario | Loan amount | Rate | Term | Extra monthly | Typical months saved |
|---|---|---|---|---|---|
| Starter plan | $250,000 | 6.50% | 30 yrs | $100 | ~35 |
| Steady acceleration | $180,000 | 5.75% | 25 yrs | $200 | ~50 |
| Annual lump boost | $90,000 | 7.25% | 15 yrs | $0 | ~18 |
Payoff acceleration metrics
This tool compares a baseline amortization schedule to a schedule with extra principal payments. For a $250,000 balance at 6.50% over 30 years, the minimum payment is about $1,580 per month. Adding $100 monthly reduces the payoff horizon by roughly 35 months in many cases and can cut total interest by tens of thousands, depending on timing. A one-time $5,000 extra in month 12 is applied to principal, often trimming several more months and lowering lifetime interest beyond monthly extras noticeably too.
Interest compounding impact
Monthly interest is calculated as Balance × (APR/12). With a 6.50% APR, the first-month interest on $250,000 is about $1,354. Because interest is computed on the remaining balance, every extra dollar paid to principal reduces the next month’s interest. Over long terms, the cumulative effect is visible as a faster-declining balance curve.
Monthly versus lump-sum strategy
Consistent monthly extras provide steady principal reduction, while an annual lump sum concentrates impact in a single month. For example, $1,200 per year paid in December produces a similar yearly cash outlay as $100 monthly, but the monthly approach typically saves slightly more interest because principal is reduced earlier in the year. The calculator shows the difference clearly in the schedule and chart.
Budget sensitivity and break-even
Increasing the regular payment override accelerates payoff even without extras. However, if the chosen payment is too close to monthly interest, the balance may not amortize reliably. A practical check is that Payment > Interest in the early months. If your first-month interest is $1,354, a $1,450 payment leaves only $96 for principal, so payoff improvements will be limited unless you add extras.
Using exports for planning
Exported schedules support budgeting, refinancing comparisons, and goal tracking. The CSV format is ideal for spreadsheet projections, while the PDF provides a clean document for discussions. When you switch between Baseline and With extras, export the version you need and record key metrics: months saved, interest saved, and the updated payoff month.
FAQs
Yes. Extra payments are applied to principal, so the next month’s interest is calculated on a smaller balance. That usually increases the principal portion of every future payment.
Monthly extras reduce principal earlier and more frequently. Annual extras apply once in the selected month, which can be useful for bonuses, but may save slightly less interest than spreading payments.
Use it when you pay more than the minimum every month. The override sets your fixed payment used in both baseline and extra scenarios, keeping comparisons consistent.
If the payment is too close to monthly interest and you add no extras, the balance may not amortize properly. Increasing the payment or adding extras restores principal reduction.
The minimum payment formula does not change, but paying extras effectively accelerates payoff. Your contractual payment may stay the same; the calculator shows the financial impact on time and interest.
Months saved is the baseline payoff length minus the payoff length with extras, using the same start month and payment assumptions. It reflects schedule math, not lender-specific rules or fees.