Loan Prepayment Savings

Free Loan Prepayment Savings calculator with clear step-by-step results.

About Loan Prepayment Savings

Extra principal reduces the balance that accrues interest, so both the term and total interest shrink.

Formula

Prepaying adds to the payment, cutting principal faster and shortening the term

Worked example

With the default values below, Loan Prepayment Savings returns Estimated Interest Saved of $752.29. Change any input above and every figure here is recalculated in your browser.

Inputs used

Loan balanceminimum 0 $: 20,000 $
Annual rateaccepts 0–40: 7
Months leftminimum 1: 60
Extra monthly paymentminimum 0 $: 100 $

Results

Estimated Interest Saved: $752.29
Approx. Months Saved: 12.00
Balance After Prepaying: $18,800.00

Step by step

1Values used
2Formula
3Estimated Interest Saved= $752.29
4Approx. Months Saved= 12
5Balance After Prepaying= $18,800.00

Assumptions and limits

The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation, tax or fees or charges into account.
Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

How does this calculator work?