Personal Loan Payoff Calculator
See your personal loan amortisation month-by-month. Add extra payments and watch the payoff date jump forward and the lifetime interest drop. Free.
Personal Loan Payoff Calculator
Enter your personal loan. Add an extra monthly payment to see how much sooner you pay off the loan and how much interest you save. Pure amortisation math — works for personal, auto, student, and most installment loans.
First 24 months
| Month | Payment | Interest | Principal | Balance |
|---|---|---|---|---|
| Loading… | ||||
How to Use the Personal Loan Payoff Calculator
Enter your current balance, rate, and remaining term
All three are on your loan statement. Use the current outstanding balance (principal), the note rate (APR), and the years remaining — not the original loan terms.
Set an extra monthly payment
Even an extra USD 50-100/month dramatically shortens the loan and cuts interest. The summary shows the months and interest you save at that extra rate. Set it to 0 to see the original amortisation only.
Read the summary card
The tool shows base monthly payment, actual monthly payment (with extra), the original payoff date, the new accelerated payoff date, months saved, and lifetime interest saved. The accelerator effect is largest in the early years.
Check the amortisation table
The first 24 months show the month-by-month split between interest and principal — interest is heavy at the start and falls as the balance reduces. Print this table and pin it on the wall as accountability.
How Personal Loan Amortisation Actually Works — and Why Extra Payments Hit So Hard
Reducing-Balance Amortisation: The Math Lenders Don't Explain
Every US personal, auto, and student loan uses reducing-balance amortisation. Each month, interest is computed on the current outstanding balance — not the original loan amount — and your monthly payment covers both interest and a chunk of principal. As the balance falls, the interest portion of each payment falls and the principal portion grows. This is why early in the loan, most of your payment is going to interest; late in the loan, most is going to principal. The Truth in Lending Act (Regulation Z, 12 CFR 1026.18) requires US lenders to disclose the APR, finance charge, total of payments and the payment schedule before you sign — but not the month-by-month split between interest and principal, which is what the table above supplies.
Here's the counterintuitive consequence: on a USD 18,000 / 11.5% / 5-year personal loan, the first month's payment of USD 395 includes USD 173 of interest and USD 222 of principal. By month 30 (halfway through), the same USD 396 payment is USD 101 interest and USD 295 principal. The "interest tail" is heaviest at the start of every amortising loan.
Why Extra Payments Work Disproportionately
When you make an extra USD 100 payment in month 1, the lender applies it directly to principal — which means the next month's interest is computed on a USD 100 lower balance. That saves you interest every month for the remaining life of the loan. The compounding effect is significant: USD 100 extra per month on the example loan above shortens the term by 15 months and saves about USD 1,525 in interest over the life of the loan, on a loan that totals about USD 5,750 in original interest. That's roughly a 27% reduction in interest cost for an extra 25% of monthly cash flow.
The earlier in the loan the extra payment lands, the larger the savings. Extra payments in year 1 compound for the full remaining term; extra payments in year 4 only have one year left to compound. Annual lump-sum bonuses applied to principal in January will outperform the same amount paid in December. If your loan has no prepayment penalty (most US conforming personal loans don't, per the CFPB), every dollar of extra payment is mathematically guaranteed to save you more than a dollar over the life of the loan.
"An extra USD 100/month on a 5-year USD 18,000 personal loan at 11.5% pays the loan off 15 months early and saves about USD 1,525 in lifetime interest — a 27% interest reduction for a 25% increase in monthly cash."
When Not to Pay Extra
The math says always pay extra; reality is more nuanced. Don't accelerate a 6% loan if you carry 24% credit card debt — pay the card first. Don't pay extra to the lowest-rate debt while higher-rate debt is outstanding (the "debt avalanche" rule). Don't deplete your emergency fund to pay down loans — the rule of thumb is keep 3-6 months of essential expenses liquid before accelerating any non-emergency debt. And don't make extra payments without verifying with your lender that they're being applied to principal rather than advancing your next due date — some servicers default to the latter unless you specifically instruct them otherwise.
For US borrowers with an old loan at a rate above current market rates, refinancing into a fresh lower-rate loan can outperform extra payments. A USD 18,000 / 11.5% / 5-year loan refinanced to 7.5% over the same term saves about USD 2,100 in interest with no extra cash outlay. Run both scenarios — refinance vs accelerated payoff — and pick the larger savings. Some borrowers do both: refinance to a lower rate, then accelerate the new loan.
The same loan spans a sixfold rate, and extra payments may go to next month
US personal loan APRs run from single digits for prime borrowers to the 36% ceiling that the Military Lending Act and many state usury laws use — a sixfold spread on the same product, driven by credit score.
Most US conforming personal loans have no prepayment penalty — every extra dollar of payment goes directly to principal reduction.
The Truth in Lending Act (Regulation Z, 12 CFR 1026.18) requires US lenders to disclose the APR, finance charge, total of payments and payment schedule before you sign — and whether a prepayment charge applies.
An extra USD 100/month on a 5-year USD 18,000 / 11.5% loan pays it off 15 months early and saves about USD 1,525 in interest.
Early payments have compounding benefit — an extra USD 1,000 in year 1 saves more total interest than the same USD 1,000 in year 4.
The "debt avalanche" method pays down the highest-rate debt first while making minimum payments on lower-rate debts — mathematically optimal.
The "debt snowball" method pays down the smallest balance first regardless of rate — psychologically easier, lifetime interest cost slightly higher.
US credit card APRs averaged 22.2% on accounts assessed interest in Q4 2025 (Federal Reserve G.19) — prioritise card payoff over personal-loan acceleration if both exist.
EU consumer credit under Directive 2008/48/EC caps early-repayment compensation at 0.5-1% of the prepaid amount — making EU payoffs structurally cheap.
The Consumer Financial Protection Bureau advises telling your servicer in writing that extra payments are to be applied to principal — some default to advancing the next due date instead.
Frequently Asked Questions
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US personal loans use reducing-balance amortisation. Each month, interest is computed on the current outstanding balance: monthly interest = balance × (APR ÷ 12). Your monthly payment covers that interest plus a chunk of principal. As principal falls, the interest portion of subsequent payments falls and the principal portion grows. The Truth in Lending Act (Regulation Z) requires lenders to disclose the APR, finance charge, total of payments and payment schedule before signing; the tool above turns those terms into the month-by-month split.
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Not always — verify with your servicer. Some US loan servicers default to applying extra payments forward (advancing your next due date) rather than to principal. The CFPB explicitly recommends checking your servicer's policy and explicitly instructing them to apply extras to principal. Many lender web portals have a check-box for "apply additional payment to principal". If they refuse, refinance with a lender who doesn't play this game.
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Most major US personal-loan lenders charge no prepayment penalty, but some do — check the loan note. Regulation Z (12 CFR 1026.18(k)) requires the Truth in Lending disclosure to state whether a charge may be imposed for paying off principal early, so the answer is on the disclosure you signed. The Dodd-Frank Act restricted prepayment penalties on qualified mortgages; personal loans aren't covered by that protection.
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The debt avalanche pays minimums on all debts and puts every extra dollar toward the highest-rate debt — mathematically optimal, lowest total interest. The debt snowball pays minimums on all and attacks the smallest balance first regardless of rate — psychologically easier because you eliminate accounts faster and feel progress. Avalanche saves more money; snowball helps people stick with the plan. The difference for typical consumer debt portfolios is 5-15% of total interest — meaningful but not enormous. See our Debt Snowball vs Avalanche Calculator for a side-by-side.
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Compare the loan's APR to the after-tax return you can realistically expect from investing. A guaranteed 11.5% saving (loan APR) beats a probabilistic 7% market return after taxes — even though the headline numbers look closer, the guaranteed-vs-probabilistic distinction matters. Rule of thumb: pay off any debt above 6-7% APR before investing in taxable accounts; tax-advantaged retirement contributions (401(k) match especially) generally outrank even high-rate debt because the match is an instant 50-100% return. Always pay off credit card debt (about 22% average APR on interest-bearing accounts, Federal Reserve G.19, Q4 2025) before any other competing use.
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Yes — the math is identical. US auto loans, federal student loans, and private student loans all use reducing-balance amortisation. The differences are around fees and prepayment terms: federal student loans never have prepayment penalties; auto loans rarely do; private student loans occasionally do (check the note). The tool above treats them all the same — enter the balance, rate, and remaining term and add any extra payment.
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Each row is one month. "Payment" is your total monthly outflow (base EMI + extra). "Interest" is what the lender keeps. "Principal" is what reduces your balance. "Balance" is what's left after that month's payment. Notice how the interest column shrinks and the principal column grows over time — that's the reducing-balance mechanic. The table is generally most useful for the first 24 months where the split shifts most.
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Depends on the rate gap. On the example loan above (USD 18,000 at 11.5% over 5 years), refinancing into 7.5% over the same term saves about USD 2,100 in interest with no extra cash outlay. If you're already at 7% and current market rates are 7.5%, refinancing won't help — accelerated payments are the path. Often the best approach is to do both: refinance to a lower rate first, then apply extra payments to the new loan. Use our Loan Comparison Calculator to compare offers and then come back here to model accelerated payoff on the new loan.
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The amortisation math is universal but the prepayment regime differs. US conforming personal loans generally have no prepayment penalty. Singapore and Malaysia bank personal loans often carry an early-repayment fee in the first year or two of the loan — check the facility letter — after which prepayment is free. Indonesian and Philippine personal loans frequently use "flat" interest calculation (interest computed on the original principal rather than reducing balance), making prepayment savings smaller than the headline rate suggests. If you have a flat-rate Asian loan, the effective reducing-balance APR is roughly 1.8-2.0× the flat rate — use our Loan & EMI Calculator for the reducing-balance comparison.
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Run both scenarios. US federal Direct Loan rates for undergraduates have ranged from 2.75% (2020–21) to 6.53% (2024–25), with graduate and PLUS loans higher — generally below long-run equity returns. Federal loans also have income-driven repayment plans and Public Service Loan Forgiveness that can be valuable if your career path qualifies; private student loans rarely have these protections. Specific to ASEAN expats: if you might return home, currency-flow risk is real — a strengthening SGD vs USD makes your USD loan cheaper in SGD terms over time, weakening the case for aggressive payoff. If you're staying in the US long-term, treat private student loans like any other 6-8% loan: pay off above-market rates, refinance below-market rates, accelerate after the emergency fund is built.
Method & sources
How it computes
Reducing-balance amortisation: monthly interest = balance × APR/12; level payment M = P·r/(1−(1+r)^−n); an optional extra amount is added to every payment and applied to principal; the schedule runs until the balance reaches zero and reports months and interest saved versus the no-extra schedule.
What this tool implements
- Simple-interest-per-period reducing balance, monthly compounding, extra payment applied to principal in the same month
- Final payment capped at balance + interest (no overpayment); iteration cap of term + 600 months
- US Regulation Z (12 CFR 1026.18) disclosure terms — APR, finance charge, total of payments, payment schedule, prepayment statement — described accurately; no 'full amortisation schedule' disclosure is claimed
- EU Consumer Credit Directive 2008/48/EC Art. 16 early-repayment compensation caps (1% / 0.5%) cited as comparator
Sources
- law.cornell.edu
- Kellison SG. The Theory of Interest. 3rd ed. New York: McGraw-Hill; 2009. Chapter 3 (amortization schedules).
- Directive 2008/48/EC of the European Parliament and of the Council of 23 April 2008 on credit agreements for consumers, Article 16.
- federalreserve.gov — default.htm
What can make this go out of date
- Federal Reserve G.19 credit-card APR quoted in prose (22.15% on accounts assessed interest, Q4 2025; released monthly)
- Federal Direct Loan rates quoted in prose (studentaid.gov, set each July)
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