Find out how much time and interest a single lump-sum payment toward your principal can save you, compared to sticking with your regular payment schedule.
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How the Extra Payment Loan Calculator works
When you put a lump sum toward your loan's principal, that money comes off your balance
immediately — before your lender calculates next month's interest. Because interest on an
amortized loan is charged on whatever balance remains, a smaller balance means less interest
every single month for the rest of the loan, even though your regular payment doesn't change.
This calculator compares two schedules side by side: your loan as originally scheduled, and the
same loan after your one-time extra payment is subtracted from the balance. Both are re-amortized
using your same fixed monthly payment, so you can see exactly how many months you'd shave off and
how much interest you'd avoid paying.
New Balance = Current Balance − Extra Payment
Then re-amortized at your same payment: Payment = (Balance × r) / (1 − (1 + r)^−n)
The earlier in the loan you make the extra payment, the more you tend to save — because interest
is compounding on a larger balance for longer at the start of a loan. Even a modest one-time
payment can meaningfully shorten a long-term loan.
Frequently asked questions
A one-time extra payment (modeled here) reduces your principal immediately and saves interest for the rest of the loan, but a recurring extra payment made every month saves even more over time. If you want to see the effect of adding extra to every payment instead of a single lump sum, try the Early Loan Payoff Calculator.
Not for this calculator's math — interest is calculated on your balance once per month, so an extra payment is treated as reducing your balance before that month's interest is calculated. In practice, making it as early as possible in your billing cycle can save a small amount more, depending on your lender's exact accrual method.
Some loans, especially certain mortgages and auto loans, charge a fee for paying down principal faster than scheduled. Check your loan agreement or ask your lender before making a large extra payment, since a penalty could offset some of the interest you'd save.