Your loan details
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No extra payment
With extra payment
Compare payoff scenarios
Same extra-payment amount applied five different ways.
| Scenario | Payoff date | Term | Total interest | Interest saved |
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Compare extra-payment amounts
One-time prepayment today, regular payment unchanged. Tap a card to load it.
"I want to pay off my loan by…"
Pick a target year - we estimate three ways to get there.
Remaining balance over time
Without extra payments vs. with extra payments, year by year.
Interest vs. principal each year
With extra payments applied - how each payment splits over time.
Amortization schedule
Payment-by-payment breakdown with your extra payments applied - not a rough estimate, a full schedule.
| Period | Opening balance | Payment | Interest | Principal paid | Extra | Closing balance |
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Understanding loan prepayment
Plain-language answers that apply regardless of where you borrowed.
What is loan prepayment?
Prepayment means paying an amount towards your loan over and above your scheduled payment. It reduces your outstanding balance directly, which reduces the interest charged on every payment after it.
How does it actually work?
Interest is charged on your outstanding balance each period. When you prepay, that balance drops immediately, so each following payment carries a smaller interest portion - either shortening your term or lowering your payment.
How is interest saving calculated?
This calculator runs a full amortization schedule with your extra payments included, then compares total interest paid against a schedule with no extra payments. The difference is your estimated saving - not a rough percentage guess.
Reduce term or reduce payment?
Many lenders let you choose. Keeping the payment the same and reducing term typically saves more interest overall. Reducing the payment instead eases monthly cash flow but saves less interest. Neither is universally better - it depends on your priorities.
What is a part-payment?
A part-payment (or "extra payment") is any prepayment that doesn't close the loan entirely - you pay extra while the loan continues. This is distinct from full early payoff, where you clear the entire outstanding balance at once.
Biweekly and weekly payments
Paying biweekly or weekly instead of monthly effectively adds extra payments each year without feeling like "extra," since 26 biweekly or 52 weekly payments add up to more than 12 monthly ones. Confirm your lender applies each payment to principal promptly and doesn't just hold it.
Fixed vs. variable rate loans
This calculator assumes your entered rate holds for the remaining term. For a variable-rate loan, treat results as a snapshot based on today's rate - actual savings will shift if your rate changes.
Things to check with your lender first
Prepayment or early-repayment charges, annual overpayment limits, minimum extra-payment amounts, and whether extra payments reduce your term or your payment by default. Rules vary widely by country, lender and loan product.
More calculators
Focused tools built on the same accuracy-first amortization engine.
Country-specific guides - published only where the content has been researched and verified for that market:
Frequently asked questions
Is this calculator accurate?
It runs a genuine payment-by-payment amortization simulation - not an approximation like "balance × rate" - using the same reducing-balance method most fixed-payment loans worldwide use. Actual figures still depend on your lender's exact interest-application dates, compounding convention and fees, so confirm final numbers with your lender.
Why might my numbers differ slightly from another calculator or an AI chatbot?
This calculator runs a full month-by-month (or period-by-period) simulation: it recalculates the outstanding balance, interest and principal split after every single payment, exactly how a lender's own amortization schedule works. Many online calculators and AI tools instead use a quick averaged formula to estimate total interest, which is fine for a rough figure but can drift from the real result - especially over long tenures or with recurring extra payments - because it doesn't account for the exact timing of each payment or how the final, often smaller, payment is sized. Small differences (usually well under 1%) between tools are expected and come down to this methodology gap, not an error in either one.
Does this work outside the US?
Yes. The math (principal, rate, term, payments, amortization) is universal and doesn't depend on country. What varies by country is prepayment rules, penalties and limits - for those, always check your loan agreement or ask your lender, since we don't assume every country's rules are the same.
Does prepaying always save money?
In almost all cases, yes - reducing the balance earlier reduces the interest charged on it for the rest of the loan. The exception is if your lender charges prepayment penalties that outweigh the interest saved; check whether these apply to your loan.
What's the difference between reducing term and reducing payment?
Reducing term (payment unchanged) generally saves more total interest. Reducing payment (term unchanged) gives lower periodic outgo but saves less interest overall. This calculator's main scenario models the "reduce term" approach by default.
Is my data saved anywhere?
No. All calculations run in your browser. Nothing you enter is sent to a server or stored outside your own device.
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