Extra Payment Calculator
See how extra payments reduce loan term and interest
Original Payoff
30 years
New Payoff
20 yrs 10 mo
Time Saved
9 yrs 2 months
Interest Saved
$90,077
Extra Paid
$50,000
Return on Extra Payments
180%
Visualization
Loan Balance Over Time
- Remaining Balance
- Principal Paid
Original Loan
$200,000
Total Interest
$303,692
Total Paid
$431,640
Results are estimates and may vary based on lender terms and fees.
Results are estimates for informational purposes only and do not constitute financial advice. Actual results may vary based on lender terms, fees, and other factors.
Extra Payment Calculator Formula
Interest savings equals the original total payments minus the new total (payments at accelerated schedule plus extra amounts paid). This formula captures both the reduced number of payments and the lower total interest.
How the Extra Payment Calculator Works
- 1Enter your loan details (amount, rate, term)
- 2Specify extra monthly payment amount
- 3Optionally add annual lump sum payments
- 4View the accelerated payoff timeline
- 5See total time and interest saved versus standard payments
Extra Payment Calculator Key Terms
- Extra Principal Payment
- Additional money paid beyond the minimum that goes directly toward reducing the loan balance.
- Accelerated Payoff
- Paying off a loan before the scheduled term by making extra payments.
- Interest Savings
- The total interest avoided by paying off the loan early.
- Effective Return
- The interest rate you effectively 'earn' by paying down debt—guaranteed and tax-free.
Extra Payment Calculator Tips
- •Extra payments go entirely to principal reduction (no interest charged)
- •Confirm your lender applies extra payments to principal, not future payments
- •Specify 'apply to principal' when making extra payments
- •Consider your loan rate versus potential investment returns when deciding
- •Even small extra amounts compound into significant savings over time
When to Use This Extra Payment Calculator
- ✓Planning to pay off your mortgage early
- ✓Evaluating how raises or bonuses could accelerate debt payoff
- ✓Comparing mortgage prepayment versus investing
- ✓Understanding the impact of rounding up payments
- ✓Setting payoff goals and tracking progress
Extra Payment Calculator Examples
$200/month Extra
Adding $200/month cuts payoff from 30 to 22 years and saves $95,000 in interest.
One Extra Payment/Year
One extra payment annually reduces term by 4.5 years and saves $47,000 in interest.
Biweekly Payments
Biweekly payments (26 half-payments = 13 monthly) save $42,000 and 5 years.
Understanding Extra Payment in Depth
Extra payments toward loan principal are one of the most reliable financial moves available. Unlike investments, the return is guaranteed and equals your loan interest rate—often higher than safe investment alternatives.
The Math of Extra Payments
On a $300,000 mortgage at 6.5% over 30 years, the standard payment is $1,896. Adding $200 extra monthly reduces the term to 23 years and saves $87,000 in interest. That's a 6.5% guaranteed return on every extra dollar paid.
Strategic Timing of Extra Payments
Extra payments have the greatest impact early in the loan when the balance is highest. As you approach payoff, the benefit diminishes. Prioritize extra payments in the first half of your loan term for maximum impact.
Prepay or Invest?
This depends on loan rate, investment expectations, and risk tolerance. If your mortgage is at 6.5%, prepaying guarantees that return. To justify investing instead, you'd need to expect returns above 6.5%—and accept the risk of potentially earning less. Prepaying is the conservative, guaranteed choice.
Practical Extra Payment Strategies
Round up payments to the nearest hundred. Apply tax refunds or bonuses as lump sums. Set up biweekly half-payments (equals one extra payment yearly). Even an extra $50-100 monthly makes a meaningful difference over time.
Extra Payment Calculator FAQs
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Marcus Chen
Financial Analysis SpecialistMarcus has over 12 years of experience in quantitative finance and personal financial planning. He specializes in loan analysis, investment modeling, and consumer debt strategies. His methodologies incorporate industry-standard financial mathematics used by major lending institutions.
Editorial Standards: All calculations use industry-standard financial formulas. Content is reviewed for mathematical accuracy and updated to reflect current market conditions. This tool provides estimates for informational purposes and does not constitute financial advice.