1. What is the Loan Amortization Calculator?

The Extra Payment Loan Calculator generates a detailed amortization schedule showing how extra payments affect your loan payoff timeline. It calculates monthly payments, interest savings, and time saved by making additional principal payments.

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 (USD)

Explanation: The calculator then applies any extra payment directly to principal and recalculates the amortization schedule accordingly.

3. Importance of Extra Payments

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

4. Using the Calculator

Tips: Enter loan principal, interest rate, term in years, and optional extra payment. All values must be positive numbers. The calculator will show your amortization schedule with and without extra payments.

5. Frequently Asked Questions (FAQ)

Q1: How do extra payments affect my loan?
A: Extra payments reduce principal faster, which decreases total interest and may shorten your loan term significantly.

Q2: Should I pay extra principal or refinance?
A: This depends on your interest rate and loan terms. Use this calculator to compare options.

Q3: Are there prepayment penalties?
A: Some loans have prepayment penalties. Check your loan documents before making extra payments.

Q4: How often should I make extra payments?
A: Even one extra payment per year can make a difference. Consistency yields the best results.

Q5: Does this work for all loan types?
A: This calculator works best for fixed-rate loans. Adjustable-rate loans require more complex calculations.