Works for personal loans, student loans, lines of credit converted to term loans, and small business loans. Add an extra monthly payment to see how much faster you'd be debt-free.
Monthly payment
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Total interest
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Total paid
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Payoff time
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Interest saved by extra payments
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How loan payments work
A fixed-rate loan is repaid in equal monthly installments. Each payment first covers the interest accrued that month (balance × monthly rate); the remainder reduces your principal. Because the balance shrinks every month, the interest portion falls and the principal portion grows — that's amortization.
Why extra payments are so powerful
Every extra dollar goes straight to principal, which means every future month charges interest on a smaller balance. On a $20,000 loan at 9.5% over 5 years, an extra $100/month typically saves over $1,000 in interest and cuts about a year off the payoff — try it above with your own numbers.
APR vs. interest rate
The advertised interest rate covers only interest. APR (annual percentage rate) also folds in mandatory fees like origination charges, making it the better number for comparing offers. If your loan has significant fees, enter the APR here for a more realistic total cost.
Frequently asked questions
What types of loans does this work for?
Any fixed-rate, fully amortizing loan: personal loans, student loans, debt-consolidation loans, and most small business term loans. It doesn't model revolving credit like credit cards — use our credit card interest calculator for that.
Is there a penalty for paying a loan off early?
Some lenders charge prepayment penalties, though many personal loans allow free early repayment. Check your agreement — if there's no penalty, extra payments are usually the single most effective way to cut costs.
What's a good interest rate for a personal loan?
It varies with credit score and market rates. As of recent years, strong-credit borrowers see roughly 7–12% on unsecured personal loans, while weaker credit can push above 20%. Secured loans (backed by collateral) run lower.
Should I consolidate credit card debt with a loan?
If the loan's APR is meaningfully lower than your cards' (often 20%+), consolidation can save a lot — provided you stop adding new card debt. Compare the total interest figures from this tool and the credit card calculator.
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