See how extra payments on your loan cut total interest and shorten the term. Compare the original schedule with the accelerated one.
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In an equal-principal-and-interest (annuity) loan your monthly payment stays the same, but the split between interest and principal changes every month. Because interest is charged on the remaining balance, early payments are mostly interest. Prepaying extra shrinks that balance sooner, so every later month accrues less interest — the result is a smaller total interest bill and a shorter term.
Each period you pay a fixed amount M = P × r × (1+r)^n / ((1+r)^n − 1), where P is the principal, r the monthly rate and n the number of months. The payment never changes, but the interest part of each payment shrinks as the balance falls.
In this calculator the extra amount is added to the regular payment, so while you prepay you send M + extra each month. Many banks offer the alternative of keeping the payment unchanged and simply shortening the term; the interest saved is very similar.
The last payment covers only what is left: the remaining principal plus that month's interest. It is usually smaller than M + extra, and the simulation caps the final payment at the outstanding balance so the total paid never exceeds it.
Yes. Interest is charged on the outstanding balance, so a dollar of principal removed early stops generating interest for every remaining month. The same total prepayment made later saves less.
No. Every number is computed locally in your browser with JavaScript. The page works fully offline once loaded, and nothing you enter is stored or transmitted.
If you just finished with Loan Prepayment Calculator, the natural next steps are EMI Loan Calculator, Debt Payoff Calculator, Car Loan Calculator, or browse every tool in Cross-border Finance.