How do extra payments reduce loan interest?

Extra payments go directly to principal, so the remaining balance accrues less interest in every future period. Even small extra payments compound into meaningful interest savings over the life of the loan.

Is it better to pay extra monthly or make a one-time payment?

Monthly extras steadily reduce principal across the whole payoff. A one-time payment is most powerful early in the loan because it removes interest on that amount for every remaining period. The best choice depends on cash flow.

What happens if my payment is less than the interest?

If your payments do not cover the interest charged, the unpaid interest is added to the balance, so the balance stays flat or grows. The calculator detects this and shows a not-paid-off result instead of a payoff date. A recurring or one-time extra payment that lifts the combined payment above the interest can still pay the loan off.

Does this calculator work for personal loans?

Yes. Personal loans typically use simple amortization on a fixed balance, which matches the math used here. Enter your current balance, APR, and current payment to estimate payoff.

Does this calculator work for car loans?

Yes. Auto loans are also amortized loans. Use your current balance, APR, and monthly payment. For a brand-new car loan, the Loan Calculator is a better fit for the initial schedule.

Is this loan payoff estimate financial advice?

No. This calculator is an educational estimate. Fees, prepayment rules, daily interest accrual, and lender policies can change the exact payoff date and interest cost.

Loan Payoff Calculator

Estimate your loan payoff date, total interest, and how extra payments can help you pay off debt faster.

Extra payment impactPayoff timelinePlanning estimate

Loan payoff inputs

Enter your current loan balance, interest rate, payment, and any extra payments.

Current loan balance (£)

Outstanding loan balance today.

Annual interest rate / APR (%)

Annual rate applied to the loan balance.

Current payment (£)

Your usual payment per period (monthly, biweekly, or weekly). Enter 0 for a one-time settlement only.

Extra payment per period (£)

Optional extra amount applied to principal every period.

One-time extra payment (£)

Optional lump sum applied with the first payment.

Payment frequency

How often you make a payment.

Estimated payoff date

1 Dec 2030

Based on your payment and any extra payments. First payment assumed one month from today.

Time to payoff

4y 1m

49 monthly payments.

Total interest

£4,051.02

Estimated interest paid until payoff.

Interest saved

£1,018.22

Compared with current payment only.

Time saved

1 year

Compared with current payment only.

Total amount paid

£29,051.02

Sum of all payments and extras.

Total extra payments

£4,800.00

Extras applied across all periods.

First-period interest

£156.25

Approximate interest for the first monthly period.

Payoff scenario comparison

Scenario	Payment	Extra	Time to payoff	Total interest	Total paid	Interest saved
Current payment only	£500.00	£0.00	5y 1m	£5,069.24	£30,069.24	£0.00
With extra payments	£500.00	£100.00	4y 1m	£4,051.02	£29,051.02	£1,018.22

Payoff schedule

Support

Loan payoff support layer

Payment formula

Each period, interest is calculated on the current balance. Anything above interest reduces the principal; unpaid interest is added to the balance.

Estimate only

Results are estimates. Fees, prepayment rules, and daily interest accrual can change exact figures.

Extra payment impact

Extra payments directly cut principal, lowering interest charged in every remaining period.

Interest savings

Compare current payment only against the extra-payment scenario to see how much interest you avoid.

Loan payoff basics

What is a loan payoff calculator?

A loan payoff calculator estimates how long it will take to clear a loan from where you are today, how much interest you will pay along the way, and how extra payments can shorten the journey. Unlike a Loan Calculator that designs a brand new repayment schedule, this tool focuses on payoff strategy for an existing balance.

Balance

The amount currently owed. Interest is charged on the unpaid balance each period.

APR

The annual interest rate, converted to a periodic rate based on your payment frequency.

Payment

The amount paid each period. The portion above interest reduces principal.

Extra payment

Any amount above the scheduled payment goes straight to principal.

How it works

How this loan payoff calculator works

Period-by-period simulation

The calculator loops through each payment period, applies interest, subtracts the payment plus any extras, and stops when the balance reaches zero.

Baseline comparison

In parallel, it simulates the same loan without extra payments. The difference shows your interest saved and time saved.

Safety checks

If your payments, including any extras, cannot reduce the balance, the calculator reports that the loan is not paid off instead of running forever.

Frequency aware

Monthly, biweekly, and weekly schedules each use their own periodic rate, so payoff time reflects how often you actually pay.

Formula

Loan payoff formula

Periodic interest

Interest = Balance × (APR ÷ 100 ÷ Payments per year)

Each period, interest is added to the loan before your payment is applied.

Balance update

New Balance = Balance + Interest − Payment − Extra

Whatever is left after interest goes to principal, including any extra payment. Unpaid interest is added to the balance.

Payoff condition

Loop until Balance ≤ 0 or warning shown

The schedule ends when the balance is cleared, with a smaller final payment. If the balance stops falling, the loan is reported as not paid off.

Strategy

How extra payments reduce interest

Because interest is charged on the remaining balance, anything that lowers the balance lowers every future interest charge as well. A small recurring extra payment can compound into thousands in savings over a long loan, and a single well-timed lump-sum at the start of the loan removes interest on that amount for every remaining period.

Frequency

Monthly vs biweekly payoff

Monthly payments

Twelve payments a year. Easiest to align with most paychecks and billing cycles.

Biweekly payments

Twenty-six payments a year, made every two weeks. Enter the amount you actually pay every two weeks. Changing frequency without adjusting the payment amount changes your annual repayment total.

Limits

When a loan may not be paid off

If the periodic interest is equal to or greater than your payment, the balance stays flat or grows, because unpaid interest is added to it. This is most common with high-APR loans paid at minimum levels. To make progress, increase the payment, lower the rate (for example via refinancing), or add an extra payment so the principal can shrink.

Caveats

Limitations of this estimate

Fees and charges

Lender fees, late charges, and prepayment penalties are not modeled here.

Daily interest

Some loans use daily interest accrual. This calculator uses periodic accrual aligned to your payment frequency, and assumes the first payment is one payment interval from today.

Variable rates

If your APR changes during the loan, the actual payoff may differ from this estimate.

Not advice

This calculator is educational. Review your loan agreement and lender terms before making decisions.

FAQ