Calculate How Much Money Saved by Paying Extra on Loan

How to Use This Calculator

To calculate how much you'll save by paying extra on your loan:

1. Enter your current loan balance
2. Input your current monthly payment amount
3. Specify your loan interest rate
4. Enter the number of years remaining on your loan
5. Choose how much extra you want to pay each month
6. Click "Calculate" to see your savings

The calculator will show you the total interest saved, the new loan term, and the total savings over the life of the loan.

How It Works

The calculator uses the following formula to determine your savings:

Where:

• Original Interest is the total interest you would pay without making extra payments
• New Interest is the total interest you would pay with the extra payments
• Original Term is the original loan term in months
• New Term is the reduced loan term in months with extra payments

The calculator uses standard amortization calculations to determine the interest and term changes.

Worked Example

Let's say you have a $20,000 loan with a 5% annual interest rate. You're currently paying $300 per month and have 5 years remaining. If you pay an extra $100 per month:

1. Original interest paid: $3,600
2. New interest paid: $2,400
3. Original term: 60 months
4. New term: 48 months
5. Total savings: $1,200 (interest) + $1,200 (term) = $2,400

This means you'll save $2,400 by making the extra payments.