Early Repayment Calculator
Calculate interest savings from extra payments or lump sum payoff
Enter values above to calculate savings
How to Use
- Enter your original loan amount, interest rate, and total term in months.
- Enter your current month number (e.g., 12 if you are 1 year in).
- Enter an extra monthly payment amount, a one-time lump sum, or both.
- Click 'Calculate Savings' to see how much interest you save.
- Compare the original payoff date with the new accelerated payoff date.
About Prepayment
Power of Extra Payments
Making extra payments on a mortgage or loan can save enormous amounts of interest. On a $300,000 30-year mortgage at 6%, adding $200/month extra reduces the loan to about 24 years and saves approximately $70,000 in interest. The savings compound because every extra dollar paid reduces future interest charges.
Extra Monthly vs. Lump Sum
Both strategies work, but extra monthly payments provide consistent, steady savings. A lump sum payment is best when you receive a bonus or windfall. Any principal payment directly reduces the balance, which reduces all future interest. The earlier in the loan you make extra payments, the greater the savings.
Check for Prepayment Penalties
Before making extra payments, verify your loan has no prepayment penalties. Some loans charge a fee (typically 1–3% of the prepaid amount) if you pay off early or make large extra payments. Most mortgages originated in recent years do not have prepayment penalties, but older loans and some auto loans may.
Specify Principal-Only Payments
When making extra payments, always designate them as 'principal only.' Some lenders apply extra money to future payments instead of reducing the current balance, which does not save as much interest. Confirm with your lender how to properly submit principal-only payments.
Key Features
- Calculates interest saved from extra monthly payments and/or lump sum
- Shows new payoff date and months saved compared to original schedule
- Handles mid-loan scenarios by specifying current month
- Supports combining both extra monthly payments and lump sum payment