Extra Payment Calculator
Calculate how extra payments can reduce your loan term and save you money on interest. See the impact of additional principal payments on your mortgage or loan.
Loan Information
Payment Comparison
Regular Payment
$1,520
With Extra Payment
$1,620
How Extra Payments Work
Extra payments go directly toward the principal balance of your loan, which:
- Reduces the principal faster: Less principal means less interest charged
- Shortens the loan term: You'll pay off the loan earlier
- Saves on total interest: Less time paying interest means more money saved
- Builds equity faster: More of your home's value becomes yours sooner
Extra Payment Strategies
Monthly Extra Payments
Add a fixed amount to your monthly payment. Even $50-100 extra can save thousands in interest.
Annual Lump Sum
Use tax refunds, bonuses, or windfalls to make large principal payments once a year.
Bi-weekly Payments
Pay half your monthly payment every two weeks. This results in 26 payments (13 months) per year.
Round Up Payments
Round your payment up to the nearest $50 or $100. Small but consistent extra payments add up.
Frequently Asked Questions
Should I make extra payments or invest the money?
This depends on your loan interest rate versus potential investment returns. If you can earn more investing than your loan rate, investing might be better.
Can I make extra payments on any loan?
Most loans allow extra payments, but check for prepayment penalties. Some loans charge fees for paying early.
When should I avoid extra payments?
Avoid extra payments if you have high-interest debt, no emergency fund, or better investment opportunities.
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