How long until a loan is paid off at my current payment?
Three numbers from your statement settle it: the balance, the rate, and the payment. With $15,000 at 8% and $350 a month, the formula gives 50.64 payments, so you make 51, with a smaller last one.
n = −ln(1 − B × r ÷ P) ÷ ln(1 + r)B is the balance, P the payment, and r the annual rate divided by 12, here 0.006667. In the first month, $100.00 of your $350 goes to interest and only $250.00 reduces what you owe. As the balance falls, more of each payment goes to principal.
| Balance | $200/mo | $300/mo | $400/mo | $500/mo | $750/mo | $1,000/mo |
|---|---|---|---|---|---|---|
| $5,000 | 2 yrs 4 mos | 1 yr 6 mos | 1 yr 2 mos | 11 mos | 7 mos | 6 mos |
| $10,000 | 5 yrs 2 mos | 3 yrs 2 mos | 2 yrs 4 mos | 1 yr 10 mos | 1 yr 3 mos | 11 mos |
| $15,000 | 8 yrs 9 mos | 5 yrs 2 mos | 3 yrs 8 mos | 2 yrs 10 mos | 1 yr 10 mos | 1 yr 4 mos |
| $25,000 | 22 yrs 6 mos | 10 yrs 3 mos | 6 yrs 10 mos | 5 yrs 2 mos | 3 yrs 2 mos | 2 yrs 4 mos |
| $50,000 | Never | Never | 22 yrs 6 mos | 13 yrs 10 mos | 7 yrs 5 mos | 5 yrs 2 mos |
How much do extra payments save on a loan?
More than you might guess, because each extra dollar stops being charged interest for the rest of the loan. On this loan, $100 extra a month saves $703 and ends it 1 yr 1 mo sooner.
| Extra a month | Time left | Interest left | Interest saved |
|---|---|---|---|
| $25 | 3 yrs 11 mos | $2,505 | $219 |
| $50 | 3 yrs 8 mos | $2,319 | $405 |
| $100 | 3 yrs 2 mos | $2,020 | $703 |
| $200 | 2 yrs 7 mos | $1,611 | $1,113 |
| $300 | 2 yrs 2 mos | $1,342 | $1,382 |
| $500 | 1 yr 7 mos | $1,012 | $1,712 |
Ask your lender how to send extra money so it goes to principal. The FTC describes these as "principal-only" payments in its advice on car loans. Then check your next statement to confirm the balance fell by the full amount.
Biweekly payments
Paying half your payment every two weeks means 26 half-payments a year, the same as one extra monthly payment. On this loan that's about $29.17 extra a month, which ends the loan in 3 yrs 11 mos and saves about $253. The tool estimates this by spreading that extra payment across the year. Ask how your lender credits partial payments before you rely on it.
Is a lump sum better than monthly extra payments?
Dollar for dollar, sooner is better, so a lump sum today beats the same money spread out over time. A $2,500 payment now saves $878 on this loan. The same $2,500 two years from now saves $393, because it's had less time to stop interest.
| Lump sum | Time left | Interest saved |
|---|---|---|
| $500 | 4 yrs 1 mo | $193 |
| $1,000 | 3 yrs 11 mos | $377 |
| $2,500 | 3 yrs 5 mos | $878 |
| $5,000 | 2 yrs 8 mos | $1,552 |
Before you send a large sum, make sure you'd still have cash for an emergency. If your other debts cost more, pay those first. A dollar toward a higher rate saves more interest than a dollar toward a lower one, and the debt payoff calculator lines them up.
What payment gets my loan paid off by a certain date?
To clear this loan in 24 months, you'd pay $678.41 a month, which is $328.41 more than today. That's solved exactly from the formula below, so there's no trial and error. It also saves $1,442 in interest.
P = B × r × (1 + r)^T ÷ ((1 + r)^T − 1)| Paid off in | Monthly payment | Total interest |
|---|---|---|
| 1 yr | $1,304.83 | $658 |
| 1 yr 6 mos | $887.11 | $968 |
| 2 yrs | $678.41 | $1,282 |
| 3 yrs | $470.05 | $1,922 |
| 4 yrs | $366.20 | $2,577 |
A lump sum changes the math, and the calculator accounts for when you pay it. With $2,500 paid at once, reaching the same 24-month date takes $566.09 a month instead of $678.41. Choose "Hit a target date" above and set both.
Why would a loan never get paid off?
If your payment doesn't cover the monthly interest, the balance never falls. A $50,000 loan at 8% charges $333.33 of interest a month, so a $300 payment can't ever clear it. That's a real "never", and the calculator says so instead of showing a date.
This can happen on an interest-only loan, a deferred loan, or a loan with a very low minimum. Anything above $333.33 starts to reduce the balance, though slowly. On this balance, clearing it in 10 years would take $306.64 a month more than the $300 payment. If you're stuck here, call your lender, or talk with a nonprofit credit counselor about your options.
How do you calculate a loan payoff amount?
Don't rely on your statement balance to close a loan. Ask your lender for a payoff amount good through a specific date. The CFPB explains, in its guidance for mortgages, that a payoff amount differs from your current balance, since it can add interest through the payoff day, unpaid fees, and a prepayment penalty. Other loans work on the same idea, so use the lender's number for your last payment.
Extra payments assume simple interest, charged on what you owe. On a precomputed loan, the interest is figured at the start, and you get back only a refund of the unearned part if you prepay in full. Federal law (15 U.S.C. 1615) requires that refund and bars the "Rule of 78s" method on precomputed consumer loans longer than 61 months. That ban doesn't reach shorter loans, so check your contract's refund method and which kind of loan you have.
Check for a prepayment fee as well. The CFPB says your contract and state law decide whether you can pay a car loan off early without one. If there's a fee, enter it under advanced options to see whether paying early still comes out ahead. For a home loan, the mortgage payoff calculator is the better fit, since it also weighs prepaying against investing. To see a new loan's whole schedule, use the loan calculator.
Common questions
Does this work for a car loan, personal loan, or student loan?
Yes, for any fixed-rate loan with a level monthly payment. Enter what you owe today, not the original amount. It doesn't fit credit cards, whose minimums change, or variable-rate loans beyond the current rate. For federal student loans, the student loan calculator covers repayment plans.
Why does my lender's payoff date differ from this one?
Lenders may charge interest by the day, so paying early or late in a cycle moves the numbers by a little. This tool charges one month's interest per payment. Late fees, deferred payments, or a precomputed loan would also change it.
Can I see an amortization schedule?
Yes. The results show each payment split into principal and interest, ending at a zero balance, and you can download it as a CSV. If a loan never clears, you'll see only the first 10 years.
Should I pay off my loan early or invest?
It depends on your rate and what you could safely earn. Paying off a loan at 8% is like earning 8% with no risk, before any tax effects. This tool doesn't compare the two, but the investment calculator can show what the same money might grow to.
Do extra payments lower my required monthly payment?
This tool assumes not: the required payment stays the same and the loan ends sooner. Ask your lender how it treats your loan.
Sources
- What is a payoff amount and is it the same as my current balance? · Consumer Financial Protection Bureau
- Can I prepay my loan at any time without penalty? · Consumer Financial Protection Bureau
- 15 U.S. Code § 1615: Prohibition on use of Rule of 78s · Legal Information Institute, Cornell Law School
- Auto trade-ins and negative equity · Federal Trade Commission