Loan Payoff Simulator
See how extra payments and a one-time lump sum accelerate loan payoff. Enter the loan balance, interest rate and the minimum monthly payment, then add an extra monthly amount and an optional lump sum at a chosen month. The simulator compares payoff time, total interest and months saved against the baseline schedule.
How to use
- 1
Enter the loan balance and rate
Type the current outstanding balance and the annual interest rate. Defaults reflect a credit-card-style balance at 18.9% APR.
- 2
Set the minimum monthly payment
Enter the minimum payment required by your lender. If this is less than the monthly interest, the balance grows and the simulator will warn you.
- 3
Add an extra monthly payment
Anything you pay above the minimum goes 100% to principal. Even small extras like 50–100/month can shave years off a long loan.
- 4
Optionally add a lump sum at a chosen month
Enter a one-time principal payment (e.g. from a bonus or tax refund) and the month number at which it is applied. Default is month 1.
Common use cases
- Decide whether to apply a year-end bonus to your mortgage or car loan.
- Quantify how a 100/month extra payment shortens a 30-year mortgage.
- Compare avalanche (extra on highest-rate debt) vs snowball strategies.
- Plan a lump-sum prepayment after selling a property or receiving an inheritance.
Limitations
- This calculator produces an estimate only and is not professional financial, tax or investment advice. Always confirm the underlying formulae with your accountant, bank or financial advisor before making decisions.
- The model assumes a fixed interest rate and a single minimum payment for the life of the loan. Variable rates, interest-only periods and payment resets are not modelled.
- Extra payments are assumed to be applied immediately to principal with no penalty. Some lenders charge early-repayment fees or require you to formally restructure the loan.
- The simulator does not model escrow, PMI or fees that change with the balance. It tracks only the principal-and-interest balance.
- If the minimum payment does not cover the monthly interest, the loan never pays off under the baseline — the tool will warn you. Increase the payment to see a realistic projection.