1. What is the Early Repayment Calculator?

The Early Repayment Calculator estimates how quickly you can pay off your home loan when making extra payments. It calculates the number of months needed to fully repay the principal based on your monthly payment amount and interest rate.

2. How Does the Calculator Work?

The calculator uses the early repayment formula:

Where:

• \( n \) — Number of months to repay loan
• \( PMT \) — Monthly payment amount (USD)
• \( P \) — Principal loan amount (USD)
• \( r \) — Monthly interest rate (decimal)

Explanation: The formula calculates how many months it would take to pay off a loan when making fixed monthly payments that exceed the minimum required payment.

3. Importance of Early Repayment Calculation

Details: Calculating early repayment helps borrowers understand how extra payments can significantly reduce the loan term and total interest paid over the life of the loan.

4. Using the Calculator

Tips: Enter your regular monthly payment amount, the principal loan amount, and the annual interest rate. The calculator will show how many months it will take to fully repay the loan at this payment rate.

5. Frequently Asked Questions (FAQ)

Q1: How accurate is this calculator?
A: The calculator provides a theoretical estimate assuming fixed payments and interest rates. Actual results may vary slightly due to rounding in real loan calculations.

Q2: Does this account for changing interest rates?
A: No, this calculation assumes a fixed interest rate for the entire loan term.

Q3: What if I make irregular extra payments?
A: This calculator assumes consistent monthly payments. For irregular payments, a more detailed amortization schedule would be needed.

Q4: How much can I save by paying early?
A: Early repayment saves all future interest that would have been paid on the principal during the eliminated months.

Q5: Are there prepayment penalties?
A: Some loans have prepayment penalties - check your loan terms before making extra payments.