1. What is the Loan Repayment Calculator?

The Bankrate Loan Repayment Calculator with Extra Payments helps you determine your monthly loan payment and shows how extra payments can reduce both your interest costs and loan term.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

Where:

• \( P \) — Principal loan amount (USD)
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Number of months in loan term
• \( PMT \) — Monthly payment amount

For extra payments: The calculator applies additional payments directly to principal and recalculates the amortization schedule.

3. Importance of Extra Payments

Details: Even small extra payments can significantly reduce total interest paid and shorten your loan term. This calculator shows exactly how much you can save.

4. Using the Calculator

Tips: Enter the principal amount, annual interest rate, loan term in years, and optional extra monthly payment. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How much can I save with extra payments?
A: Savings depend on loan amount, interest rate, and how much extra you pay. Even $50/month can save thousands over a 30-year mortgage.

Q2: Should I pay extra principal or invest?
A: Compare your loan interest rate with expected investment returns. Paying off high-interest debt usually provides better guaranteed returns.

Q3: When do extra payments have the most impact?
A: Early in the loan term when more of your payment goes toward interest rather than principal.

Q4: Are there prepayment penalties?
A: Some loans have penalties for early payoff. Check your loan agreement before making extra payments.

Q5: How do I make sure extra payments go to principal?
A: Specify with your lender that additional payments should be applied to principal, not future payments.