Loan payoff calculator

The monthly rate is i = APR ÷ 12 under the nominal convention or i = (1 + APR)^(1/12) − 1 under the effective convention. If you enter a payment P on a balance B, the number of payments left is n = ⌈−ln(1 − i × B ÷ P) ÷ ln(1 + i)⌉, the standard annuity formula solved for the term and rounded up to a whole month; the final payment is then whatever is left. If you enter the months left instead, the payment is the level payment P = B × i ÷ (1 − (1 + i)^−n), rounded half-up to the smallest unit of the currency.

Both paths are then simulated month by month. Each month the interest round(balance × i) is added, the scheduled payment is taken (never more than what is owed), and any extra for that month, whether a regular extra, a one-off lump sum or a recurring lump, is taken off the balance that remains. In shorten the term mode the payment stays the same and the loan simply ends sooner. In lower the payment mode the level payment is recalculated for the months remaining after each extra, so the end date is unchanged and the payment falls. That mode needs the months left as an input; with a fixed payment the term is shortened instead and the calculator says so.

Interest saved is the baseline interest minus the accelerated interest; months saved is the difference in the number of payments. An early repayment charge is applied only when extras are paid: a fixed fee as entered, a percentage of the total overpaid, or the deferred-settlement estimate balance × ((1 + i)^(days ÷ 30.4167) − 1) on the balance settled in the final month, for 28 or 58 days. Net saving is interest saved minus the charge. A payment no higher than the first month’s interest is rejected, because the balance would never fall; the credit card minimum payment calculator shows the same trap on a card.

Full method, rounding and tests on the methodology page

Lenders in the UK and Ireland often offer two ways to apply an overpayment, and the calculator models both. Shortening the term keeps your payment the same and brings the end date forward. It always saves the most interest, because the balance falls as fast as it possibly can. Lowering the payment keeps the original end date and reduces the monthly amount after each overpayment, which frees up cash now at the cost of a smaller saving. In the worked example the same 100 a month saves 355.48 one way and 226.84 the other.

In the United States and Canada most instalment loans simply apply an extra payment to principal and keep the payment unchanged, so the term shortens by default. A few lenders apply an overpayment to future instalments instead, which saves nothing: the sign is a next-payment due date that jumps forward after the overpayment. The lender’s terms say which treatment applies and whether it can be changed on request.

Whichever you choose, the calculator assumes the rate stays fixed and no further borrowing is added. If you are weighing several debts rather than one loan, the debt payoff calculator orders them by rate or by balance, and the debt consolidation calculator prices a single new loan against keeping them separate. The guides on avalanche versus snowball and consolidation loans explain the trade-offs behind each.

Some loan agreements charge for repaying early. In the United States these are usually called prepayment penalties; the Consumer Financial Protection Bureau explains that whether a lender can charge one depends on the contract and on state law, and that it must be disclosed in the loan documents. Enter it here as a fixed fee or as a percentage of the amount overpaid, whichever your agreement describes.

In the United Kingdom, section 94 of the Consumer Credit Act 1974 gives a borrower the right to repay a regulated agreement early, in full or in part, and section 95 provides for a rebate of the interest and charges. The Consumer Credit (Early Settlement) Regulations 2004 let the lender calculate the settlement figure at a date deferred by 28 days after your notice, plus one further month when the agreement runs for more than a year, which is why a settlement quote can be a little more than the balance on your statement. The calculator’s deferred settlement option estimates that extra interest on the sum settled in the final month; the lender’s actuarial figure, based on the original schedule, can differ, so treat it as an estimate and ask for the exact figure before you pay.

Partial overpayments on UK regulated loans are normally free of deferment interest, and the 2004 Regulations apply to agreements regulated by the Act rather than to mortgages. For a car loan specifically, including bi-weekly payments and a settlement-figure estimate, use the car loan payoff calculator, which uses the same engine with car-specific options.

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• CFPB — What is a prepayment penalty?
• CFPB — Can I prepay my loan at any time without penalty?
• legislation.gov.uk — Consumer Credit Act 1974, section 94: Right to complete payments ahead of time
• legislation.gov.uk — The Consumer Credit (Early Settlement) Regulations 2004 (SI 2004/1483)

Estimates for general information only — not financial, credit or legal advice. Your actual figures depend on your lender’s or card issuer’s exact terms, fees, minimum-payment rules, interest calculation method and any changes they make. Check your statements and speak to a qualified adviser before making decisions. Interest is charged monthly on the balance; lenders that accrue daily, and any early settlement figure your lender quotes, can differ from these estimates.

Page reviewed October 9, 2026 by the DebtWren team · Methodology · Changelog · Report an error