Extra payment loan calculator: how the savings work
Estimate how recurring extra principal or a one-time payment changes your payoff schedule. Compare the original loan with the same loan plus your extra payments, then check the impact on your cash reserve.
Model checked: 9 November 2026 · Best Finance Calc
Open the free calculatorRelated editable workbook
Enter the loan and the payment plan
In Simulate, enter the usable loan amount, annual rate, number of payments and payment frequency. Choose nominal or effective annual interest explicitly. Add recurring extra principal or a lump sum and its payment period. The forecast applies an extra after the regular payment and caps the final payment at the amount due. Use Schedule to check individual periods, not just the headline saving.
Worked example: US$100 extra each month
For US$20,000 at 12% nominal annual interest over 36 monthly payments, the modeled regular payment is US$664.29. With no fees or insurance, the original schedule charges US$3,914.30 interest. Adding US$100 monthly extra principal, without recasting the regular payment, repays the balance in 31 payments and charges US$3,303.67 interest: US$610.64 less interest and five fewer payments. The last payment is smaller than the planned US$764.29. These figures come from this site's periodic-interest engine, not a lender quote.
Why an extra payment changes future interest
For a monthly nominal rate, r = annual rate / 12. Each period's interest is opening principal × r. Principal paid is the regular payment less that period's interest; extra principal then reduces the remaining balance. A smaller next-period balance produces less interest at the same positive rate. At 0% interest, extra principal can shorten the term without creating an interest saving.
Shorter term, recast and payment frequency
Keeping the original regular payment usually shortens the schedule. Selecting recast changes future regular payments after an extra, so compare that option separately. Changing from monthly to fortnightly payments is a different scenario: enter the matching payment count and rate convention rather than assuming that splitting a monthly payment always creates the same result.
Check the budget and the actual contract
Use Budget to test whether an extra would take cash below your chosen reserve. Confirm that your lender applies extra money to principal, whether a prepayment charge applies, and whether the contract uses daily interest or another allocation rule. This forecast does not infer those conditions. Its actual-payment ledger is a separate daily simple-interest model.
Questions about this model
Does an extra payment always lower my regular payment?
No. With recast off, this model keeps the regular payment and shortens the term; recast is a separate choice.
Is the result a guaranteed lender payoff quote?
No. Posting dates, penalties, contract terms and rounding can differ. Verify the modeled schedule against your agreement.
Model and reference material
Educational estimates, not a credit offer or personal financial advice. The examples use stated assumptions and the site’s documented engine.