Loan Payoff Calculator

Loan Payoff Calculator

Overwhelmed with debt? A debt repayment plan is a good place to start.

Use our loan payoff calculator to help you pay off loans faster—so you can save money on interest.

This tool can help you see the total amount of interest you’ll pay over the lifespan of the loan and determine how much you can afford to realistically put toward your debt repayment each month. The more you’re able to put toward paying off your loan(s), the sooner you’ll be debt free and the less interest you’ll pay in the long run.

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How to use our loan payoff calculator

1. Enter your loan details

Input some information about your current credit card and loan debts, including how much you owe, interest rate, and minimum monthly payment amount.

2. Compare debt repayment plans

Use our calculator to compare the debt snowball and avalanche methods. Debt snowball focuses on the smaller balances first, while debt avalanche pays off debts with the highest interest rates first.

3. Factor in extra payments

Figure out how making extra payments can help you get out of debt faster and save you money on interest.

4. Estimate debt-free date

Predict when you’ll pay off individual loan and credit card debt accounts with each repayment plan.
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5. Calculate interest savings

See how much money each debt payoff plan will save you on interest, and estimate your total interest paid for each strategy.

How our loan payoff calculator works

There are two ways to implement the loan payoff calculator:

  • To determine the amount of time it will take to fully repay your loan given a certain monthly payment
  • To figure out how much you’ll need to pay each month to finish repaying your loan in a certain amount of time.

Plug in the amount you owe, or the loan amount. For example, let’s say you have a $20,000 loan. Add in your annual percentage rate (APR). In this example, we’ll say it’s 10%.

If you’re using the first approach of calculating by loan term, you’ll also need to select the number of months of your term. From there, you can add in additional payments to see how much faster you can repay the loan. In this case, figure you’re putting an extra $200 toward your loan with a 60-month loan term.

You’d see your estimated monthly payment: $424.94.

And the amount of interest you’ll pay over time: $5,296.40.

If you decided instead to calculate based on your monthly payment, presuming the same loan amount and APR but a $500 monthly payment, the calculator would show that you’d pay off the loan in 49 months, or just over four years, and pay $4,500 in interest. Just make sure you don’t get hit with an early repayment penalty.

How do you calculate loan payoff amounts?

Our loan payoff calculator uses the loan amounts and interest rates you provide to figure out how much your monthly payments will be and when you will have fully repaid your debts.

Credello’s recommendations for ways to repay your loans early and/or maximize your savings

Increase the amount you pay each month or your number of monthly payments: Seems like a no-brainer, right? You don’t have to stop at fulfilling your minimum monthly payment, assuming you have the funds to do so. The more you pay toward your loan payoff, the quicker you’ll be debt-free. Whether you make a singular extra payment every year, increase your payoff strategy to include bimonthly payments, or round your monthly there are plenty of options for throwing more money at your debt—just make sure you’re meeting your essential needs. Read more

Loan payoff terms and definitions

When it comes to debt repayment calculators and debt in general, there are certain terms that come up frequently and need further clarification. Here are the ones it’s important to know:

  • Amortization : “Amortizing” a loan essentially means killing it off, so amortization is the act of paying off a certain amount over time through planned, incremental payments.
  • Annual percentage rate (APR) : This is sort of a fancy term for interest rate, or the cost of taking out a loan, but unlike interest rates, your APR includes other charges or fees to give you a better sense of how much you’re actually paying.
  • Extra payments : Any amount more than the monthly minimum payment or any separate payment you make in addition to your minimum monthly payment.
  • Loan term : The total length of your original installment loan, usually represented in months, ranging from 12 to 96 months, depending on the type of loan.
  • Monthly payment : The amount you pay on a particular loan, including both the principal and interest.
  • Remaining balance : The amount you have left to pay on your loan. If you started out with a principal of $20,000, and you’ve paid $12,000 toward that, your remaining balance would be $8,000.
All you need to know about loan payoff

Is payoff a good idea?

Should you pay off debt or save? Ideally, you can find a way to do both. But the best method to pay off your debt depends on your ability to make payments and your ultimate goal—i.e., becoming debt-free faster, saving on interest, or lowering monthly payments. Our debt payoff calculator can help you decide your best route toward repayment.

Is it cheaper to pay off a loan early?

Paying off your loan early can save you on interest—just make sure your lender won’t charge you a prepayment fee to make up for the interest you won’t be paying. Our early loan payoff calculator can help you determine if early repayment is right for you, factoring in extra payments to help you save on interest and get out of debt faster.

What is the best way to pay off multiple debts?

Our multiple debt payoff calculator can help you determine the best ways to pay off debt . Depending on your goal, the right method can lower your monthly payments, save you money on interest, or get you out of debt faster. Some popular payoff methods include debt snowball, debt avalanche, and hybrid versions of the two.

Recommended: Debt 101: A Complete Guide to Understand Debt & Its Types

Is it better to pay off your loans all at once?

A debt consolidation loan can help you pay off multiple loans at once. First, you should consider prepayment penalties and potential fees associated with consolidating. Also, think about how closing all of your loans at once can impact your credit score. If consolidating is right for you, you can get your loans paid off and simplify your payments. If consolidating doesn’t help you save money in the long run, then it’s best to consider other options.

What is loan balance and loan interest?

Your loan balance is how much money you need to repay for a loan. In other words, take the original amount of your loan and subtract all the payments you’ve already made. Loan interest is the amount of money you owe in addition to the loan principal—interest rates can be fixed or variable.
Frequently asked loan payoff questions

How can I pay off my loan early?

Making extra payments on your loan can help you pay off the loan faster and save on total interest paid— as long as your lender doesn’t charge a prepayment fee. Use our loan payoff calculator to see how extra payments can save you money and bump up that debt-free date—and how much extra you can afford to pay in addition to your usual payments.

How much extra should you pay on your loan?

Making extra payments on your loan can help you pay off the loan faster and save on total interest paid—as long as your lender doesn’t charge a prepayment fee. Use our loan payoff calculator to see how extra payments can save you money and bump up that debt-free date—and how much extra you can afford to pay in addition to your usual payments.

How do you calculate a per diem interest on loan payoff?  

Per diem interest refers to the amount of interest you’ll pay per day on a loan. So, calculating this figure is as simple as knowing your interest rate and how many days are in our pesky Gregorian calendar and plugging those into a calculator.

Take your interest rate—let's say 10% again—and convert it to a decimal, so 0.10. Divide that by 365 (the number of days in a year, except during Leap Years. This Greg guy is a trip). That gives you your daily interest rate: about 0.00027. Then multiply that by your principal, let’s use that $20,000 number again, to get your per-diem interest: about $5.48, or how much you pay for coffee every day.

How do I get a loan payoff letter?

A loan payoff letter, also known as a payoff statement, is a document sent by a lender to a borrower with instructions on how to pay off any outstanding amount on your loan in one lump sum. You can request a payoff letter from your lender if you’re prepared to pay off an installment loan before the end of the loan term. To get a loan payoff letter, call your lender’s customer service line, send a written request, or submit an online request.

What is the difference between debt avalanche and debt snowball?

While both debt repayment methods can be effective, debt snowball prioritizes paying off your smaller balances so you can get some early wins. Debt avalanche , however, prioritizes paying off your debts with the highest interest rates, in the hopes of saving you money on interest in the long run. Our debt payoff calculator helps you compare the two methods to see which may work best for you.