Loan Payoff Calculator

Every extra dollar goes straight to principal (no interest is owed on it yet), which shrinks the balance interest is calculated on next month. Over a long loan, this compounds: a small extra payment early in the life of the loan saves disproportionately more interest than the same payment near the end.

There's no closed-form formula — the calculator simulates month-by-month. Each month: interest = balance × (APR / 12), principal = (payment + extra) − interest, new balance = balance − principal. It repeats until the balance hits zero (or 50 years, whichever comes first).

If your payment is less than balance × APR / 12, the balance grows every month — the loan never pays off. The calculator detects this and flags it. Either increase the payment, refinance to a lower rate, or look into hardship / income-driven repayment options with your lender.

Rule of thumb: pay off debt first if the rate is higher than the long-term return you expect from investing (historically ~7% real for US stocks). High-interest debt (credit cards at 18–25%) is almost always worth eliminating first. For a 4% mortgage you might do better investing — run the numbers in the Compound Interest calculator.

The Loan Calculator sizes a brand-new loan — pick the amount, rate and term to see what the monthly payment will be. The Payoff Calculator works on an existing loan — pick the current balance and payment to see when you'll be debt-free and how extra payments accelerate that.

No. It assumes the rate and minimum payment stay constant for the life of the loan. To compare refinancing, just lower the rate and re-enter the new monthly payment; to compare a recast, lower the monthly payment and keep the rate.