How to use the loan payoff calculator
- Enter the amount you owe (principal) and the annual percentage rate (APR).
- Pick a starting point. A payment you already make shows how many months are left. A month count shows the payment that clears the balance on that schedule.
- Press Calculate for the payoff time, total interest, total paid and an amortization table.
- Try a slightly higher payment to see how much interest and time an extra amount each month saves.
How it's calculated
Payment for a term of n months = P × r ÷ (1 − (1 + r)^−n)
Each month: interest = balance × r; principal = payment − interest
In payment mode the tool steps through the loan month by month until the balance reaches zero, adding up the interest as it goes. If the payment doesn't even cover the first month's interest, the loan would never be paid off, and the tool tells you so.
Worked example
A $15,000 balance at 7% APR, paid at $400 a month, takes 43 months and costs about $1,977 in interest. Raising the payment to $500 cuts it to 34 months and about $1,537 in interest, saving roughly $440 and nine months.
FAQ
How can I pay off a loan faster?
Pay more than the minimum each month or make occasional extra payments toward principal. Check with your lender that there is no prepayment penalty.
What is the difference between APR and interest rate?
APR includes the interest rate plus certain lender fees, expressed as a yearly rate. This calculator treats the APR you enter as the yearly rate for monthly interest.
Why does most of my early payment go to interest?
Interest is charged on the remaining balance, which is highest at the start. As the balance falls, more of each payment goes to principal.