How does the calculator compare base and accelerated payoffs?
The calculator builds two amortization schedules from the same balance and rate. In the first it applies your current monthly payment; in the second it applies the current payment plus the extra amount. Each month, in each schedule, it charges interest at the rate divided by 12 on the remaining balance and subtracts the payment, continuing until the balance is gone.
The difference in months between the two schedules is your time saved, and the difference in total interest is your interest saved. Because the base payment already covers each month's interest, every dollar of the extra lands on principal. That shrinks the balance faster, which lowers the next interest charge, which leaves even more of the next payment for principal.
The comparison assumes you make the extra payment every month without a break, the rate stays fixed, and nothing new is borrowed. Skipping months or adding new charges would land you somewhere between the two schedules.
Interest for the month = Balance × (APR ÷ 12) Base: Balance − (Payment − Interest) Accelerated: Balance − (Payment + Extra − Interest) Interest saved = Interest(base) − Interest(accelerated)
- APR
- annual rate on the debt
- Payment
- your current monthly payment
- Extra
- the additional amount paid every month
Example: adding $100 a month to a $20,000 personal loan
Scenario: You have $20,000 left on a personal loan at 11.5%, with a scheduled payment of about $440 (the exact five-year payment is $439.85). You want to know what an extra $100 a month would do.
- First month's interest$20,000 × (11.5% ÷ 12) = $191.67
- Principal from the base payment$440 − $191.67 = $248.33
- Principal with the extra$540 − $191.67 = $348.33, so the balance falls $100 faster in month one alone
- Base schedule60 months and $6,388.11 in interest
- Accelerated schedule46 months and $4,821.72 in interest
- Savings14 months sooner (1 year 2 months) and $6,388.11 − $4,821.72 = $1,566.39 less interest
An extra $100 a month pays the loan off 14 months early and saves $1,566.39 in interest compared with the base schedule.
Check whether your loan has a prepayment penalty before paying ahead; most personal loans and all credit cards do not, but some installment loans do.
When does it make sense to run an extra-payment scenario?
You found room in your budget
A raise, a paid-off bill or a trimmed subscription frees up money. Testing that amount as an extra payment shows exactly what it buys in months and dollars.
Deciding which debt gets the extra
Run the same extra amount against each of your debts. The one that saves the most interest per dollar is usually the highest-rate balance, though seeing the numbers helps when the choice is close.
Comparing extra payments with refinancing
Sometimes paying more on the current loan accomplishes most of what a refinance would, without fees or a new application. Comparing the two outcomes helps you decide whether a new loan is worth the effort.
Setting a payoff goal
If you want a debt gone by a certain date, try different extra amounts until the accelerated payoff lands where you want it.
What mistakes reduce the payoff from paying extra?
Letting the lender apply extra to future payments
Some installment lenders treat an overpayment as an early payment of next month's bill rather than a principal reduction. Instruct the lender to apply the extra to principal and check the next statement.
Paying extra on a low-rate debt while a high-rate one grows
An extra dollar saves the most on the balance with the highest rate. Putting it toward a low-rate loan while a card balance accrues at a much higher rate leaves savings on the table.
Draining your emergency cushion
Extra payments are hard to get back. If an unexpected bill lands on a credit card because savings went to the loan, the gain can disappear. Keep a buffer before accelerating.
Stopping and starting
The calculator assumes the extra arrives every month. Irregular extras still help, but the savings shown assume consistency, so automating the extra amount makes the estimate more realistic.
Assuming bigger extras always mean proportionally bigger savings
Savings rise with each added dollar, but not in a straight line. Doubling the extra does not double the interest saved, because there is less interest left to eliminate.
How do different extra amounts compare?
The table keeps the $20,000 balance, the 11.5% rate and the $440 base payment fixed and varies only the extra. Even $50 a month trims several months, while larger extras compress the schedule sharply.
Notice that the savings per extra dollar shrink as the extra grows. That is not a reason to pay less; it simply reflects that you are cutting into a smaller and smaller pool of future interest.
| Extra each month | Total monthly payment | Payoff time | Total interest | Interest saved |
|---|---|---|---|---|
| $0 | $440 | 60 months | $6,388.11 | $0.00 |
| $50 | $490 | 53 months | $5,492.06 | $896.05 |
| $100 | $540 | 46 months | $4,821.72 | $1,566.39 |
| $200 | $640 | 38 months | $3,884.37 | $2,503.74 |
| $400 | $840 | 28 months | $2,810.76 | $3,577.35 |
Does it matter when you start paying extra?
Yes. Interest is highest when the balance is highest, which is at the beginning. An extra dollar paid in month one avoids interest on that dollar for every remaining month of the loan; the same dollar paid three years later avoids far less.
The table below starts the same $100 extra at different points in the $20,000 loan. Starting now saves $1,566.39; waiting two years cuts the savings to $538.83. If you can only pay extra for a limited time, front-loading it does the most good.
| Extra starts | Payoff time | Total interest | Interest saved |
|---|---|---|---|
| Now (month 1) | 46 months | $4,821.72 | $1,566.39 |
| After 1 year | 50 months | $5,407.81 | $980.30 |
| After 2 years | 53 months | $5,849.28 | $538.83 |
| After 3 years | 56 months | $6,154.21 | $233.90 |
Terms used on this page
- Principal
- Principal is the amount of money you borrow, or the amount you deposit, before any interest. On a loan, it is the balance that interest is charged against, and each payment's non-interest portion reduces it. On savings, principal is your own money, the base on which interest is earned.
- Amortization
- Amortization is the process of paying off a loan with equal, regular payments that each cover the interest due for the period plus a slice of principal. Early payments are mostly interest; later ones are mostly principal. By the final payment the balance reaches exactly zero, which is how most car, personal and student loans work.
- Prepayment Penalty
- A prepayment penalty is a fee some lenders charge if you pay off a loan early or pay down a large part of it ahead of schedule. It compensates the lender for interest it will no longer receive. Many consumer loans have no such penalty, but if yours does, the terms must appear in your loan disclosures.
- Emergency Fund
- An emergency fund is cash set aside for unexpected costs or income loss, such as a car repair, medical bill or job gap. It is usually kept in an insured, easy-to-reach savings account. A common target is three to six months of essential expenses, though any starting amount reduces the need to borrow at high rates.
- Amortization Schedule
- An amortization schedule is a table that lists every payment on a loan and splits each one into interest and principal, along with the remaining balance afterward. It shows exactly how the debt shrinks over time, how much interest you pay in total, and what you would still owe at any point.
Accelerated Debt Payoff Calculator: common questions
Is it worth paying an extra $100 a month on a loan?
Usually, if the loan's rate is meaningful and you have emergency savings in place. In this page's example, $100 extra on $20,000 at 11.5% saves $1,566.39 and 14 months. The higher the rate, the more each extra dollar is worth. On a very low-rate loan, the benefit is smaller and other uses of the money may compete.
Do extra payments go toward principal automatically?
Not always. Credit cards apply any amount above the minimum to the balance, but some installment lenders treat overpayments as prepaying the next installment. Specify that the extra is a principal-only payment, using the lender's online option or a note, and confirm on the next statement. A small mistake here can quietly erase the benefit, since prepaying a future installment does not reduce the interest being charged today.
Is a lump sum better than extra monthly payments?
A lump sum paid now saves more than the same total spread over many months, because it removes principal sooner. If you receive a windfall such as a tax refund, applying it immediately does more than parceling it out. Monthly extras are easier for most budgets and still add up.
Will paying extra lower my monthly payment?
On most installment loans, no. The required payment usually stays the same, and the loan simply ends sooner. Some lenders will recast a loan after a large prepayment to lower the payment, but that is uncommon outside mortgages. On a credit card, a lower balance can reduce the required minimum.
Should I pay extra on debt or save the money?
It depends on the debt's rate and your cushion. Paying a debt earns a guaranteed return equal to its rate, which is hard to beat on high-rate balances. Without emergency savings, though, a surprise expense can end up on a card. Many people build a basic buffer first, then accelerate.
Will my credit score dip when an extra-payment plan closes a loan?
It can cause a small, temporary dip when an installment account closes, because your mix of open accounts changes. That effect is usually minor compared with the interest saved, and the paid-in-full account stays on your report as positive history for years. If you have no other open installment accounts, the effect may be slightly more noticeable, but it typically fades as you keep paying other accounts on time.
How do I find extra money to put toward debt?
Look for amounts that already exist rather than new sacrifices: a payment that just ended, a raise, a cut subscription, or rounding your payment up. Automating the extra on payday makes it consistent, which is what the calculator assumes. Windfalls such as tax refunds or bonuses can also go straight to the balance. Even irregular amounts help, because every dollar of principal removed stops accruing interest.
Does the calculator work for credit cards?
Yes, as long as you treat the base as a fixed payment and stop adding new charges. Enter the card balance, APR, the fixed amount you pay now and the extra you can add. For the shrinking minimum-payment path, the minimum payment calculator is the better fit. Keep in mind that card rates are often variable, so revisit the estimate whenever your statement shows a new APR.
What if I can only pay extra some months?
You will land between the base and accelerated results. Every extra dollar still reduces principal and the interest charged on it afterward. To estimate, enter an average extra amount, keeping in mind that earlier extras save more than later ones. Another approach is to save the extra in a separate account and send it as a lump sum whenever it reaches a set amount.
Sources
- Credit cards — Consumer Financial Protection Bureau. Accessed October 17, 2026.
- Regulation Z (Truth in Lending), 12 CFR Part 1026 — Consumer Financial Protection Bureau. Accessed October 17, 2026.
- Credit reports and scores — Consumer Financial Protection Bureau. Accessed October 17, 2026.
We cite primary sources: regulators, central-bank data and federal agencies. Worked examples on this page are our own calculations, last checked October 17, 2026. See our methodology.