Tool
See exactly what you'll pay each month, how much goes to interest, and what happens if you pay a little extra.
Throwing an extra hundred bucks a month at your loan might not feel like much, but the math adds up fast. Interest is calculated on your remaining balance, so every dollar of principal you knock out early means less interest down the road.
Here's a quick example: on a $500,000 loan at 5% over 5 years, paying an extra $2,000 per month saves you close to ten thousand in interest and gets you debt-free months ahead of schedule. The bigger the loan and the higher the rate, the more dramatic the savings.
Try it yourself with the calculator above. Plug in your actual numbers and slide the extra payment up and down to see the difference.
This calculator uses the standard amortization formula (also called equal installment or EMI). Your monthly payment stays the same throughout the loan, but the split between principal and interest shifts over time. Early on, most of your payment goes to interest. As the balance shrinks, more goes toward principal. The formula: PMT = P * r * (1+r)^n / ((1+r)^n - 1), where r is the monthly rate and n is total months.