Amortization Formula with Extra Payments:
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An amortization calculator shows how each loan payment is split between principal and interest over time. This version includes the ability to calculate the impact of making extra payments toward the principal.
The calculator uses the standard amortization formula:
Where:
Extra Payments: Any extra payment is applied directly to the principal, reducing the balance faster and saving on total interest.
Details: Even small extra payments can significantly reduce total interest and shorten the loan term. This calculator shows exactly how much you can save.
Tips: Enter the loan amount, interest rate, term in years, and optional extra payment. The calculator will show your amortization schedule with and without extra payments.
Q1: How do extra payments affect my loan?
A: Extra payments reduce principal faster, which reduces total interest and may shorten the loan term.
Q2: Should I pay extra each month or make lump sum payments?
A: Regular extra payments have the greatest impact, but any extra payment helps. This calculator shows both scenarios.
Q3: Will making extra payments remove PMI sooner?
A: Yes, if your loan has PMI, reaching 20% equity faster through extra payments can eliminate PMI sooner.
Q4: Are there loans where extra payments don't help?
A: Some loans have prepayment penalties, but these are rare for standard mortgages today.
Q5: How accurate is this calculator?
A: It provides accurate estimates, but your actual loan terms may vary slightly based on the lender's specific calculations.