Early Payoff Calculator ⏱️
Determine the incredible savings in **total interest** and the reduction in **payoff time** by making extra, recurring payments toward your loan's principal.
Loan Acceleration Details
How Extra Payments Reduce Interest
Every dollar paid toward the **principal balance** immediately reduces the amount of debt upon which future interest is calculated. Since loans charge interest on the remaining balance, paying extra principal early drastically lowers the total interest accumulated over the life of the loan.
Calculation Method
- **Calculate Original EMI:** Determine the fixed monthly payment based on the original term.
- **Simulate Original Payoff:** Run a full amortization schedule using only the original EMI to find the original total interest and term (in months).
- **Simulate Accelerated Payoff:** Run a second full amortization schedule using the **Original EMI + Extra Payment** to find the new total interest and the accelerated term.
- **Calculate Difference:** Subtract the new interest and term from the original to determine savings.
The acceleration effect is largest early in the loan when the interest portion of the payment is highest.