Free extra payment calculator. Calculate how much interest and time you save by making extra payments on a loan or mortgage.
An extra payment calculator shows how much faster you'll pay off a loan and how much interest you'll save by adding a fixed extra amount to your regular monthly payment, since every extra euro goes directly toward reducing principal.
86.231,98 €
Interest saved
Last updated:
Extra Payment Calculator
A standard loan payment is split between interest and principal, with the interest portion calculated on your current balance. An extra payment, however, goes entirely toward principal, since the interest due for that month has already been covered by your regular payment.
This distinction matters enormously over the life of a loan: reducing principal early means every subsequent month's interest calculation starts from a smaller balance, creating a compounding benefit that grows the earlier you start making extra payments.
The Compounding Effect
An extra payment made in year one of a 30-year mortgage saves far more total interest than the same extra payment made in year twenty, because the early payment avoids interest on that principal for nearly three decades, while the late payment only avoids interest for the remaining short period.
This is why financial advice often emphasizes paying down debt aggressively early in a loan's life — the earlier a euro of principal is eliminated, the more total interest it prevents from ever being charged.
Term Reduction
Because extra payments accelerate principal reduction, and lower principal means lower interest charges, and lower interest charges mean an even larger share of each regular payment goes to principal — the loan term often shrinks by more than a proportional amount relative to the extra payment size.
This is a genuinely nonlinear effect: doubling your extra payment typically cuts more than half the remaining time off a long-term loan, since the acceleration compounds on itself throughout the loan's life.
Practical Considerations
Some loans carry prepayment penalties designed to discourage paying off debt early, since lenders earn less total interest when a loan is paid off ahead of schedule — always check your loan terms before committing to a strategy of extra payments.
Also confirm with your lender exactly how extra payments are applied. Many loan servicers default to applying extra amounts toward your next scheduled payment rather than directly reducing principal, which defeats the purpose — you typically need to explicitly designate the extra amount as a principal-only payment.
Practical Use Cases
Deciding how much extra to pay
Comparing different extra payment amounts to see the interest savings at each level.
Planning a mortgage payoff strategy
Estimating how much sooner you could be mortgage-free with consistent extra payments.
Evaluating a windfall or bonus
Seeing the impact of applying a one-time extra payment toward your loan principal.
Comparing debt payoff to investing
Quantifying the guaranteed interest savings to weigh against potential investment returns.
Setting a debt-free timeline
Finding the extra payment amount needed to pay off a loan by a specific target date.
Because interest is calculated on your remaining balance each month, any extra amount that reduces principal early also reduces every future month's interest charge. Over a 20-30 year loan, this compounding effect means even a modest extra payment can save thousands in total interest.
It depends on your loan's interest rate compared to expected investment returns. Paying down a loan is a guaranteed "return" equal to your interest rate, while investing carries risk but potentially higher long-term returns — for higher-rate debt (like credit cards), paying it down is usually the clear choice.
Most lenders allow extra payments, but you should confirm your loan doesn't have prepayment penalties, and specifically instruct your lender to apply the extra amount to principal rather than to future scheduled payments — otherwise it may just prepay your next installment instead of reducing the balance.
Paying extra every month generally saves slightly more interest than one annual lump sum of the same total amount, since the balance is reduced sooner and interest accrues on a lower balance for more of the year. Both approaches are far better than not paying extra at all.
Even occasional extra payments — a tax refund, a bonus, or a one-time windfall applied to principal — provide a real benefit, just proportionally smaller than a consistent monthly extra payment. Any principal reduction saves some future interest.