How extra payments shorten a loan
Each regular payment covers that month’s interest first, and the rest reduces your balance. Anything extra goes straight to the balance, so next month’s interest is calculated on a smaller number. That small difference compounds for the life of the loan.
Is paying extra always the right move?
Not always. If you carry high-interest credit card debt, or you lack an emergency fund, those usually come first. Also check that your lender applies extra money to principal and doesn’t charge a prepayment penalty.
How this calculator works
It uses the standard fixed-rate amortization formula with monthly compounding. Results are estimates and don’t include taxes, insurance or fees. They aren’t financial advice.