How to Use the Extra Payment Calculator
The Extra Payment Calculator shows you exactly how much time and money you can save by adding just a little bit extra to your monthly loan payments. Whether it's a mortgage, student loan, or personal loan, paying more than the minimum attacks your principal balance directly, reducing the compound interest you are charged.
Understanding the Input Options
Here is a breakdown of what you need to provide:
- Loan Amount: The current remaining balance on your loan.
- Interest Rate (%): The annual interest rate (APR) charged by your lender.
- Original Loan Term (Years): The total length of the loan in years. If you are halfway through a 30-year mortgage, enter 15 years.
- Extra Monthly Payment: The additional amount of money you plan to add on top of your required monthly payment every single month.
The Power of Extra Payments
Because interest is calculated based on your remaining principal balance, every extra dollar you pay today reduces the interest you will owe tomorrow. Over the life of a 30-year mortgage, for example, adding just $100 extra per month can shave several years off your loan term and save you tens of thousands of dollars in interest!