Personal Loan Early Repayment Calculator

Loan Payoff Equation:

\[ n = \text{iterative solution where balance} = 0 \text{ with extra payments} \]

Principal Amount (P):

USD

Annual Interest Rate:

Original Loan Term:

months

Extra Monthly Payment:

USD

Early Payoff Time:

Months Saved:

Total Interest Paid:

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What is the Personal Loan Early Repayment Calculator?

The Personal Loan Early Repayment Calculator determines how much faster you can pay off your loan by making additional monthly payments. It calculates the new payoff time, months saved, and total interest paid when you add extra payments to your regular monthly payment.

2. How Does the Calculator Work?

The calculator uses an iterative solution where:

\[ n = \text{iterative solution where balance} = 0 \text{ with extra payments} \]

Where:

\( n \) — Number of months until payoff (unitless)
\( P \) — Principal amount (USD)
\( r \) — Monthly interest rate (decimal)
\( extra \) — Additional payment (USD)
\( PMT \) — Monthly payment (USD)

Explanation: The calculator first determines your regular monthly payment, then simulates each month's payment with the extra amount applied until the balance reaches zero.

3. Importance of Early Repayment Calculation

Details: Making extra payments can significantly reduce your total interest paid and shorten your loan term. This calculator helps visualize the impact of additional payments on your loan.

4. Using the Calculator

Tips: Enter your loan principal, annual interest rate, original loan term in months, and the extra amount you plan to pay each month. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How much can I save by making extra payments?
A: Even small extra payments can save months or years on your loan and hundreds or thousands in interest, depending on your loan terms.

Q2: Should I pay extra principal or invest the money?
A: This depends on your loan interest rate vs. expected investment returns. Paying off high-interest debt usually provides better guaranteed returns.

Q3: Are there prepayment penalties?
A: Most personal loans don't have prepayment penalties, but check your loan agreement to be sure.

Q4: How often should I make extra payments?
A: Regular extra payments each month have the greatest impact, but even occasional lump sums help reduce principal faster.

Q5: Does the calculator account for changing interest rates?
A: No, this calculator assumes a fixed interest rate for the entire loan term.