Interest Savings Calculator with Extra Payments
This calculator demonstrates the power of making extra payments on your loan (mortgage, car loan, etc.). By inputting your loan details and any additional payment amounts, you can instantly see the total interest you save and how significantly you can reduce your loan term. This tool uses standard amortization formulas to provide an accurate, month-by-month breakdown of your debt reduction journey.
Calculation Results
Cumulative Principal & Interest Chart
Amortization Schedule
| Month | Standard Payment ($) | Extra Payment ($) | Total Interest Paid ($) | Principal Paid ($) | Remaining Balance ($) |
|---|
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Frequently Asked Questions (FAQ)
What is an amortization schedule?
An amortization schedule is a table detailing each periodic payment on a loan, showing how much of the payment goes toward interest and how much toward the principal, until the loan is paid off.
How does making extra payments save interest?
Extra payments directly reduce the principal balance. Since interest is calculated on the *remaining* principal balance, a lower balance means less interest accrues over the life of the loan, saving both time and money.
Are the results guaranteed?
The results are an accurate mathematical projection based on the inputs provided. However, actual loan terms may vary slightly due to rounding conventions or changes in the interest rate (for variable-rate loans).
Can I include extra payments from different years?
This calculator supports a fixed monthly extra payment and a single one-time extra payment at a specified month. For complex, varied extra payments, the amortization table can be analyzed or a more advanced calculator may be needed.
What is the formula used for calculation?
The standard monthly payment (M) is calculated using the formula: $M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]$ where $P$ is the principal, $i$ is the monthly interest rate, and $n$ is the total number of months.
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