Loan Payoff Calculator
Compare a current fixed loan payment with a recurring extra payment and estimate time and interest saved.
Content updated August 2, 2026
Monthly simple-interest amortization only. Confirm that the lender applies additional funds to principal and request an official payoff amount before closing the loan.
A recurring payment above the scheduled amount can reduce principal sooner, which lowers later interest on a monthly simple-interest amortizing loan. This calculator compares the current payment with the current payment plus one fixed extra amount.
Enter the remaining balance, nominal annual interest rate, monthly payment, and planned extra payment. The comparison includes both payoff times, both interest totals, the estimated interest saved, and the exact smaller final payment in the accelerated scenario.
The Loan Payoff formula
n = −ln(1 − rP/A) ÷ ln(1+r); accelerated payment = A + EP = current principal balance · r = nominal annual rate ÷ 12 · A = current monthly payment · E = fixed extra monthly payment. The payment must exceed rP; n is rounded up and the final installment is recalculated.
Worked example
For a $25,000 balance at 8% with a $600 monthly payment, the modeled payoff is 49 months with about $4,385.58 of interest. Adding $150 produces a 38-month payoff and about $3,367.37 of interest, saving 11 months and roughly $1,018.21.
Assumptions, rounding, and limitations
Assumptions
- The loan uses monthly simple-interest amortization at a fixed nominal annual rate divided by 12.
- The same payment is made at each month end, with a smaller final payment, and the extra amount is applied to principal.
- No new borrowing, missed payments, fees, past-due interest, rate changes, or payment holidays occur.
- Balance and payment amounts use the selected currency unit.
Rounding: Payoff months are rounded up to a whole payment count after solving at full floating-point precision. Currency displays use up to two decimal places.
Limitations
- Supports balances and payments up to 1 trillion, annual rates from 0% to 100%, and baseline payoff periods up to 100 years.
- Does not support daily simple interest, precomputed interest, variable rates, irregular payment dates, fees, penalties, or lender-specific allocation and rounding.
- The result is not a dated lender or servicer payoff quote.
Sources
- Simple interest versus precomputed interest on an auto loan — Consumer Financial Protection Bureau
- Is it better to pay off interest or principal on my auto loan? — Consumer Financial Protection Bureau
- What is amortization and how could it affect my auto loan? — Consumer Financial Protection Bureau
Solving payoff time from a fixed monthly payment
For a positive monthly rate, the payoff formula solves how many payments are required for a balance when payment A is larger than the first month's interest rP. Because the answer is usually fractional, the calculator rounds the payment count up and then calculates the exact smaller final payment.
At a zero interest rate, payoff time is simply the balance divided by the payment, rounded up. If the current payment is no larger than first-month interest, the modeled balance does not amortize and no baseline comparison is shown.
Check how the real loan handles extra money
The CFPB distinguishes simple-interest loans, where interest is calculated from the outstanding balance, from precomputed-interest loans, where extra payments may not reduce principal or interest in the same way. This calculator supports only the first structure with monthly interest periods.
Payment allocation can also include fees and past-due interest before principal. Review the contract and statement, tell the servicer how an additional payment should be applied when necessary, and request an official payoff amount for a specific closing date.
Frequently asked questions
▶How does an extra loan payment save interest?
When the lender applies the extra amount to principal on a simple-interest loan, the balance used for later interest is lower, shortening the payoff and reducing modeled interest.
▶Why does the calculator say my payment is non-amortizing?
The current payment is no larger than the first month's modeled interest, so it does not reduce principal under this monthly model.
▶Does this work for precomputed-interest loans?
No. Precomputed interest can allocate payments differently, and extra payments may not reduce interest as this model assumes.
▶Is the final payment always the regular monthly amount?
Usually not. The calculator reduces the last payment to the remaining principal plus that month's interest rather than charging a full extra installment.
▶Is this the amount needed to close my loan today?
No. A dated payoff quote can include daily interest, fees, or other contractual amounts that are not represented by this monthly estimate.
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Open calculator →Disclaimer: Loan Payoff Calculator results are estimates for general information and education only, and are not financial, tax, legal or medical advice. Verify important decisions with a qualified professional.