Loan Payoff Calculator
Find out when you'll be debt-free, how much an extra payment saves, or exactly what to pay to clear a loan by your target date.
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Every extra dollar you put toward a loan stops interest from being charged on it for the rest of the term. This calculator shows the effect in two ways. Either you choose an extra payment and see when you’ll be debt-free, or you choose a target date and see what you need to pay. It works for personal loans, student loans, car loans and any other fixed-rate debt.
How to use the loan payoff calculator
To see the effect of paying extra:
- Enter your current balance, interest rate and current monthly payment.
- Enter the extra payment you could add each month.
To find the payment that clears the loan by a set time:
- Choose What to pay to be debt-free by a set time.
- Enter how many months you want to finish in.
The results show the months to pay off, the months at your current payment, the total interest and the interest saved.
How the payoff time is calculated
Each month, the loan grows by its interest and shrinks by your payment:
interest = balance × annual rate ÷ 12
new balance = balance + interest − paymentThe calculator repeats this until the balance reaches zero, counting the months and adding up the interest. To clear the loan in a set number of months n, it uses the standard payment formula:
payment = balance × r ÷ (1 − (1 + r)^−n)Worked example
You owe $15,000 at 9%, paying $350 a month.
- At $350, the loan takes 52 months and costs $3,163.62 in interest.
- Adding $150 a month (paying $500) clears it in 35 months, 17 months sooner, with $2,056.65 of interest, a saving of $1,106.97.
- To be debt-free in 24 months instead, you need $685.27 a month, which is $335.27 more than now. That saves $1,717.11 in interest.
Strategies that speed up payoff
- Round up. Paying $400 instead of $350 is a small change that takes months off.
- Use windfalls. Tax refunds and bonuses applied early save the most.
- Pay every two weeks. Paying half your monthly payment every two weeks adds up to one extra monthly payment a year.
- Target the highest rate first. With several debts, extra money on the highest-rate loan saves the most (the avalanche method).
To see how each payment splits between interest and principal, use the amortization calculator. For a car loan payoff quote with per diem interest, use the auto loan payoff calculator.
Common mistakes
- Not telling the lender how to apply extra money. Ask for it to go to principal, not to next month’s payment.
- Ignoring prepayment penalties. Most personal and auto loans have none, but check your agreement.
- Paying off cheap debt before building savings. An emergency fund protects you from borrowing again at a higher rate.
- Using the original loan amount. Enter today’s balance, not what you first borrowed.
Frequently asked questions
How is the number of months to pay off a loan calculated?
Each month, interest is added at the yearly rate ÷ 12 and your payment is subtracted. The calculator repeats this until the balance reaches zero. The formula n = −ln(1 − B × r ÷ P) ÷ ln(1 + r) gives the same answer directly, where B is the balance, r the monthly rate and P the payment.
Should I pay off a loan early or invest the money?
Compare the loan's interest rate with what you could reliably earn after tax. Paying off a 9% loan is a guaranteed 9% return, which is hard to beat. For a 3% loan, investing may come out ahead, but it carries risk.
Does this work for credit cards?
It works if you pay a fixed amount each month and stop adding new charges. Credit card minimum payments shrink as the balance falls, which stretches repayment much further than this calculator shows.
What if my payment doesn't cover the interest?
Then the balance never falls, and the calculator tells you so. Increase the payment above the monthly interest, which is the balance × the yearly rate ÷ 12.