Early Repayment Calculator
Time Saved: 8.5 years
|
Repayment Timeline Comparison
The Early Repayment Calculator helps you understand the impact of making extra payments on your loan. It shows how much time and money you can save by paying more than the minimum required payment.
Benefits of Early Repayment
Making extra payments on your loan can significantly reduce the total cost and time to payoff. Even small additional payments can have a substantial impact over the life of a long-term loan.
Extra Monthly Payments
Adding extra money to your monthly payment directly reduces the principal balance, which means less interest accrues each month. This creates a compounding effect where each extra dollar saves more than just the interest on that dollar.
Extra Yearly Payments
Making an annual lump sum payment can be an effective strategy for borrowers who receive bonuses, tax refunds, or other periodic income. These payments can significantly reduce the loan term and total interest paid.
One-time Extra Payments
Large one-time payments, such as from selling an asset or receiving an inheritance, can dramatically reduce your loan balance and payoff time. These payments are most effective when applied early in the loan term.
Biweekly Payment Strategy
Converting to biweekly payments (paying half your monthly payment every two weeks) results in 26 half-payments per year, which equals 13 full monthly payments. This extra payment each year can reduce a 30-year mortgage by 4-5 years.
Calculating Your Savings
To maximize your early repayment savings:
- Start Early – Extra payments have the most impact in the early years of the loan
- Be Consistent – Regular extra payments are more effective than occasional large payments
- Focus on High-Interest Loans – Pay off credit cards and other high-interest debt first
- Consider Refinancing – Lower interest rates can make extra payments even more effective
When Early Repayment Makes Sense
Early repayment is most beneficial when:
- Your loan has a high interest rate
- You have a long loan term
- You have extra disposable income
- You want to build equity faster
- You plan to sell the property soon