Finance
Compare a loan's payoff time and interest before and after adding extra monthly principal.
Results update as you type. No calculate button. All calculations run locally in your browser.
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| Amount | |
|---|---|
| Months without extra | — |
| Interest without extra | — |
| Months with extra | — |
| Interest with extra | — |
| Interest saved | — |
Bars are scaled to the larger interest total. Extra principal saves interest twice over: less balance accrues interest, and the loan ends sooner.
| Scenario | Months | Total interest |
|---|
Each month, interest is balance times annual rate divided by 12, then the payment (plus extra, where applicable) reduces the balance. The final payment is capped at what remains.
Each month: interest = opening balance × annual rate ÷ 12; payment reduces the balance after interest. The simulation repeats until the balance reaches zero, once with the scheduled payment and once with the payment plus extra principal.
Balance $200,000 at 3.5% with a $1,500 payment: payoff in 170 months with $53,642.99 of interest. Adding $200 a month ($1,700 total) pays off in 145 months with $45,320.90 of interest — 25 months sooner and $8,322.09 less interest.
Fixed rate, fixed payments made on time, extra payments applied to principal with no prepayment penalty and no fees. If the scheduled payment does not cover monthly interest, the balance grows and the loan never pays off on that payment; the calculator flags that case.
It cuts the balance every month, so every later month accrues interest on a smaller amount. The effect compounds over the life of the loan.
Then the balance grows instead of shrinking, and the loan never pays off at that payment. Raise the payment above the first month's interest to make progress.
It depends on the rate. Extra payments help at any rate; refinancing helps when a lower rate is available. Compare both with the refinance calculator.
Here, yes, in full, in the month it is paid. Some lenders apply extra payments differently; check how yours treats them.
Not modeled here. A lump sum has a similar effect — it cuts the balance at once — but the timing changes the saving.
Results are estimates only and do not constitute professional advice.