How this calculator works
Extra money is applied to principal alongside the regular installment, starting with the first payment. The final payment may be smaller than the planned amount. Prepayment penalties, skipped payments and future changes to the extra amount are excluded.
The formula
New balance = old balance + monthly interest − regular payment − extra payment. Interest saved = original interest − accelerated interest.A quick example
A 12,000 zero-interest loan over 12 months normally requires 1,000 per month. Adding 500 pays it off in eight payments, saving four months and zero interest.
How to use this calculator
- Choose the settings that match your scenario, using the units shown beside each field.
- Enter loan amount, annual nominal interest rate (%), term (whole months), extra monthly payment.
- Calculate, then review the method and assumptions alongside the results.
A few common questions
Does paying early always save interest?
It reduces interest under this balance-based model when the rate is positive. At zero interest it only shortens the term.
Are prepayment charges included?
No. Compare potential interest savings with any lender charges separately.