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Take control of your debt with our loan payoff calculator. See exactly how extra payments can help you become debt-free faster and save significant money on interest.
Paying off debt early can save thousands in interest and free up monthly cash flow for other financial goals. Whether you're tackling student loans, auto loans, or personal debt, understanding how extra payments impact your payoff timeline and total interest is crucial for making strategic financial decisions.
Our loan payoff calculator uses standard amortization formulas to show exactly how extra payments affect your loan. Even small additional payments can make a huge difference—adding just $100 per month to a $20,000 loan at 6% interest could save over $2,000 and shave years off your payoff timeline. The calculator breaks down your current payment schedule and compares it to an accelerated payoff plan.
Consider the debt avalanche method: focus extra payments on your highest interest rate debt first while making minimum payments on others. This mathematically optimal approach saves the most money. Alternatively, the debt snowball method targets smallest balances first for psychological wins. Round up payments (pay $510 instead of $487) or make bi-weekly instead of monthly payments to reduce principal faster.
Before aggressively paying down debt, ensure you have an emergency fund and aren't missing out on employer 401(k) matching. Low-interest debt (under 4%) might be better kept if you can earn higher returns investing. Use our calculator to run different scenarios and find the payoff strategy that aligns with your overall financial plan and gives you peace of mind.
Compare interest rates. If debt interest exceeds potential investment returns (or you're risk-averse), pay off debt first. High-interest debt (>6-7%) should almost always be paid off before investing. Low-interest debt (<4%) might be kept while investing for higher returns.
Yes! One extra payment annually can shave years off a 30-year mortgage and save tens of thousands in interest. You can achieve this by dividing your monthly payment by 12 and adding that amount to each payment, or making a lump sum payment once yearly.
All extra payments beyond your minimum automatically reduce principal. Some lenders have separate "principal-only payment" options, but simply paying extra accomplishes the same goal. Just ensure extra payments aren't being held as "advance payments" for future months.