⏱️ Loan Payoff Calculator
Making extra repayments on a loan or mortgage not only shortens the term, it also saves significant interest — because you pay interest each month on a lower remaining balance. This calculator simulates both scenarios accurately: with and without the extra repayment.
Formula
Monthly interest = Remaining balance × (annual rate ÷ 12 ÷ 100). Time saved = difference in months between both scenarios.
Rather than one formula, this calculator simulates month by month: each month interest is calculated on the remaining balance, the repayment (with or without extra) is applied, and the balance falls. This process is simulated twice — once without and once with the extra amount — and the difference shows the real savings.
Steps
- 1Enter your remaining loan balance.
- 2Enter your annual interest rate (as a percentage).
- 3Enter the remaining loan term in years.
- 4Enter the extra monthly repayment you can afford.
Effect of extra repayment on loan term
| Extra monthly | Years saved | Interest saved |
|---|---|---|
| EUR 100 | 2-3 years | EUR 5,000-10,000 |
| EUR 250 | 4-6 years | EUR 12,000-25,000 |
| EUR 500 | 6-10 years | EUR 25,000-50,000 |
Values are approximate based on typical mortgage conditions; actual savings depend on your specific loan.
commonMistakes
- Thinking extra repayment is always the best choice, without considering alternative investments.
- Forgetting to check if your loan allows early repayment or charges penalties.
- Confusing the calculation with actual bank statements due to interest accrual differences.
useCases
- Determining if extra repayment is wise given your household budget.
- Comparing how annual bonuses can best be used: repayment or savings.
- Gaining insight into your financial flexibility and debt-free timeframe.