How to use
- Enter the loan amount, annual rate and term, and choose equal payments or equal principal.
- Enter how many monthly payments you have already made and the extra amount you want to pay.
- Compare the monthly payment, payments left, interest left and interest saved in each column.
Options explained
- Shorten the term
- Your payment stays about the same and the loan ends earlier. This saves the most interest.
- Lower the payment
- The loan ends on the same date with a smaller monthly payment. Easier on the budget, but it saves less interest.
- Payments already made
- How many months you have been repaying. The earlier you prepay, the more interest you save.
Example
A 300,000 loan at 6.5% over 30 years with equal payments, prepaying 50,000 after 36 payments (balance 289,251.73):
| Item | No prepayment | Shorten the term | Lower the payment |
|---|---|---|---|
| Monthly payment | 1,896.20 | 1,895.87 | 1,568.43 |
| Payments left | 324 | 213 | 324 |
| Interest left | 325,118.39 | 164,567.66 | 268,918.49 |
| Interest saved | — | 160,550.73 | 56,199.91 |
Frequently asked questions
Which option saves more?
Shortening the term always saves more interest because the balance falls faster. Lowering the payment keeps more cash free each month.
Will my lender charge a fee?
Some loans have early repayment charges or limits on overpayments each year. Check your agreement before paying.
Should I prepay or invest the money?
Prepaying earns you the loan's interest rate with no risk. If you can reliably earn more elsewhere after tax, investing may come out ahead — but keep an emergency fund either way.
Privacy
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