Extra Payment Savings Calculator
See what paying a bit extra on a loan, each month or all at once, saves you in time and interest before you put any money toward it.
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Your Savings
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How this is calculated
Each payment covers that month’s interest before any of it reduces your balance. Extra payments skip the interest charge and go straight toward your balance, which is why they save you beyond the amount you add over the life of a loan. This does not factor in a prepayment penalty some loans charge for paying off early, so check your loan terms before adding extra payments.
Common Questions
Does an extra payment go toward principal or interest?
Most loans apply your payment to that month’s interest before it touches your principal balance. Extra payments skip that step and go straight toward your balance, which is why they save you beyond their face value in interest over time.
Is a lump sum or extra monthly payments the stronger choice?
A lump sum paid today usually results in slightly greater savings, since it starts reducing your balance right away instead of gradually. Consistent monthly extra payments are often easier to stick with, so the stronger choice is whichever one you can actually keep up.
Will my lender apply an extra payment correctly?
Most lenders apply extra payments to your principal automatically, though not all do by default. A quick call or a note attached to your payment can confirm it goes toward principal instead of your next due date.
Are there loans where an extra payment costs money?
Some loans carry a prepayment penalty, a fee charged for paying off a balance faster than scheduled. This appears mainly on certain mortgages and auto loans, and rarely on personal loans or credit cards, so check your agreement before you commit to extra payments.
Does this work for credit card debt too?
Yes, the same math applies. Credit cards generally carry higher interest rates than most loans, so an extra payment on card debt tends to return additional savings relative to the amount you add.