1. What is the Loan Amortization Calculator?

The Personal Loan Payoff Calculator with Extra Payments helps you understand how additional payments affect your loan payoff timeline and total interest paid. It generates a detailed amortization schedule showing the impact of extra 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

Explanation: The calculator then applies any extra payments directly to the principal, recalculating the amortization schedule to show accelerated payoff.

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 the principal amount, annual interest rate, loan term in years, and any planned extra monthly payment. The calculator will show your amortization schedule and savings.

5. Frequently Asked Questions (FAQ)

Q1: How much can I save with extra payments?
A: Even $50-100 extra per month can save thousands in interest and cut years off your loan term, especially early in the repayment period.

Q2: Should I pay extra principal or invest?
A: Compare your loan interest rate to expected investment returns. Paying down debt above 4-5% is often better than investing.

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: Can I change my extra payment amount later?
A: Yes, this calculator shows the impact of consistent extra payments, but any amount helps when you can afford it.

Q5: Are there prepayment penalties?
A: Most personal loans don't have prepayment penalties, but check your loan agreement to be sure.