📉 Loan Payoff Calculator
See exactly when your loan is paid off, how much interest you'll pay, and how extra payments slash your debt.
See exactly when your loan is paid off, how much interest you'll pay, and how extra payments slash your debt.
How long does it take to pay off a loan?
The payoff timeline depends on the loan balance, the interest rate, and your monthly payment. Once your payment exceeds the monthly interest charge, every extra rand or dollar attacks the principal directly. Even a small extra payment each month often shaves years off the loan and saves thousands in interest over the life of the debt.
| Month | Payment | Principal | Interest | Balance |
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How to use this calculator
Takes about 2 minutes.
- Enter your current loan balance
- Add the annual interest rate from your loan agreement
- Enter your current scheduled monthly payment
- Add any extra monthly payment you can make on top of the minimum
- Click Calculate to see your payoff date, total interest, and the months saved by paying extra
Try these scenarios
Tap a scenario to load it into the calculator above.
Key concepts
Amortisation basics. A standard loan is paid down on a schedule where each payment covers the month's interest first, then chips away at the principal. Early in the loan, most of your payment is interest; only near the end does principal dominate.
Why extra payments help so much. Every extra dollar paid on principal saves you the interest that dollar would have accrued for the remaining loan term. On a $15k loan at 8% over 5 years, an extra $100/month cuts about a year off the term and saves a few hundred in interest.
APR vs. interest rate. The APR (Annual Percentage Rate) includes fees and is the regulated comparison figure in the US (CFPB) and UK (FCA). A loan with a low headline rate and high arrangement fee can have a higher APR than a no-fee loan with a higher headline rate.
Prepayment penalties. Some loans (especially older mortgages and subprime auto loans) penalise early payoff. Always check the contract before making lump-sum overpayments — modern personal loans rarely have them, but it's worth verifying.
Refinance breakeven. If you can refinance to a meaningfully lower rate, the savings often outweigh refinance fees within 12-24 months. A general rule: refinance if your rate would drop by at least 1 percentage point and you'll stay in the loan past the breakeven date.
Worked example — $28,000 auto loan at 9.2% APR
Take a fairly average new-car finance position in the US right now: $28,000 financed on a 72-month auto loan at 9.2% APR. That's broadly in line with Experian's State of the Automotive Finance Market Q1 2026 figures, where the average new-car loan ran above $40,000 and the average APR for prime borrowers sat near 9%. The scheduled monthly payment works out to roughly $508, and over the full 72 months you'd pay about $8,560 in interest — bringing total cost of the car to $36,560 before insurance, fuel or maintenance.
Add a $150 extra payment to principal each month and the maths shifts hard. The combined payment of $658 retires the loan in roughly 52 months instead of 72 — a saving of 20 months — and total interest drops to about $6,150. You've paid an extra $150 × 52 = $7,800 above schedule, of which $2,410 was just interest that no longer accrued. Put differently: the extra $150 a month earned a guaranteed 9.2% return for as long as the underlying loan would have run.
Now flip one input. Hold the extra payment at $150 but assume the borrower refinanced from 9.2% down to 6.5% at month 12 (a realistic scenario for someone who's improved their credit score 50+ points since taking the loan). Total interest paid across the original 12 months plus the new lower-rate amortisation falls to about $4,200 — another $1,950 saved on top of the prepayment win. The two strategies stack; they don't compete.
Common mistakes
- Sending the extra payment without specifying "apply to principal". Most US auto and personal loan servicers default extra payments to the next scheduled instalment rather than principal — your due date moves forward but interest keeps accruing on the same balance. Always write "principal only" on the memo line or use the dedicated principal-payment field in the lender's portal.
- Refinancing into a longer term to "save" on monthly payments. Dropping from a 60-month to an 84-month loan typically lowers the monthly bill but adds thousands in total interest. The rule that matters is total cost over the full term, not the size of one payment.
- Ignoring add-on products bundled into the loan. GAP insurance, extended warranties, and dealer-arranged credit life cover are often financed at the loan APR. On a 9.2% loan, $2,000 of bundled add-ons cost an extra $560 in interest over 72 months — refusing them at the desk or cancelling within the rescission window often returns hundreds.
- Stopping extra payments after the first refinance. A lower rate makes the monthly payment feel comfortable, so the extra principal habit dies. The combined "lower rate plus continued overpayment" is the single best outcome — the rate cut should fund bigger overpayments, not fund lifestyle creep.
- Letting the windfall question paralyse the decision. If a $5,000 bonus arrives, people often debate "invest vs pay down debt" for months while the cash sits in checking. The simple rule: any debt over 8% APR almost always wins versus the long-run expected return of a diversified portfolio, after tax, with risk adjusted.
Frequently Asked Questions
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