Loan Payoff Calculator
Enter your current loan balance, interest rate, and monthly payment to see how many months remain — then add an optional extra monthly payment to see exactly how much time and interest it would save you.
How the Loan Payoff formula works
Rather than a single closed-form formula, payoff time is simulated month by month:
Each month: interest = balance × (annual rate / 12) principal paid = payment − interest balance = balance − principal paid
The loop repeats until the balance reaches zero, counting months and summing total interest paid along the way.
Step-by-step calculation
- Each month, calculate interest owed as the current balance times the monthly interest rate.
- Subtract that interest from the payment to find how much goes toward principal.
- Reduce the balance by that principal amount.
- Repeat until the balance reaches zero, tracking total months and total interest paid — then repeat the same simulation with the extra payment added, to compare.
Worked example
A $15,000 balance at 7% APR with a $300/month payment pays off in about 58 months with roughly $2,350 in total interest. Adding $100/month extra ($400 total) pays it off in about 41 months with about $1,600 in interest — a savings of roughly 17 months and $750.
Frequently asked questions
Does extra payment amount really matter that much?
Yes — because interest is calculated on the remaining balance each month, even a modest extra payment shrinks the balance faster, which reduces every future month's interest charge, compounding the savings over the life of the loan.
What if my payment is lower than the monthly interest charge?
If your payment doesn't cover even the interest accruing each month, the balance will never shrink — the calculator will flag this, since you'd need a higher payment for the loan to actually pay off.
Does this account for extra payments going straight to principal?
Yes — the calculation assumes any extra payment amount is applied directly to reducing principal, which is standard for most loans, though some lenders require you to explicitly request this. Check your loan's terms.