Formula
The required payment is the standard fixed amortization payment. Each month uses:
Interest = remaining balance × annual rate / 12
Principal reduction equals the required payment plus the extra payment, minus that month’s interest. The balance is paid off when the next combined payment covers the remaining principal and interest.
Assumptions
- The required payment stays fixed for the remaining term.
- The extra amount is paid with every scheduled payment and is applied to principal.
- Interest is calculated monthly on the remaining balance and rounded to the nearest cent.
- No payment is skipped, and the interest rate does not change.
- Prepayment penalties, fees, and lender-specific posting rules are not included.
Worked example
A $25,000.00 balance at 6.5% for 5 years is originally scheduled for 5 years. Adding $100.00 every month pays it off in 4 years 1 month, which is 11 months sooner. Interest falls by $865.40. With a first payment on January 15, 2026, the final payment is on January 15, 2030.
Input definitions
- Current balance
- Principal still owed, before the next payment.
- Remaining term
- Years plus up to 11 months left on the original schedule, from 1 to 600 months total.
- Extra monthly payment
- An additional amount paid every month and applied to principal. Zero shows the original schedule.
- First payment date
- Optional date of the next payment. The payoff date keeps that day of the month when possible.
Limitations
This is an estimate, not a payoff quote or financial advice. Lenders may post extra payments later, apply them to future installments, or charge a prepayment penalty. Biweekly payments, one-time lump sums, and variable rates need a different calculation.
Questions
Where does the extra payment go?
Each month, interest is calculated on the remaining balance first. The scheduled payment and the extra amount then reduce principal. This calculator assumes the lender applies the extra amount to principal immediately.
Does paying extra change the required monthly payment?
No. The required payment stays the same. The extra amount is added every month until the balance is gone, and the final combined payment is smaller if it would otherwise exceed the remaining balance.
How is the payoff date determined?
Enter the date of the first payment. The payoff date is the date of the final payment, using the same day of the month whenever that day exists.
Are prepayment penalties included?
No. The result assumes extra principal payments are allowed without a penalty, fee, or change to the interest rate. Check the loan agreement before paying ahead.