Loan Payoff Calculator

What this calculator does

Enter three numbers you can read straight off any loan statement — current balance, interest rate, and monthly payment — and this calculator produces your payoff date, total remaining interest, and a month-by-month picture of the balance falling. Add an optional extra payment and it shows the two schedules side by side, so the value of paying more is a concrete number rather than a vague “sooner.”

It answers the question statements never do: when does this actually end, and what does the ending cost?

How the math works

Each month, your loan accrues interest on whatever you still owe:

interest = balance × (APR ÷ 12)

Your payment first covers that interest; only the remainder reduces the balance. The number of months to payoff has a closed form:

n = −ln(1 − B·r / M) ÷ ln(1 + r)

where B is the balance, r the monthly rate, and M the monthly payment. The formula also exposes the trap: if M ≤ B·r, the logarithm has no valid input — the payment doesn’t beat the interest, and the loan never ends. The calculator detects this and tells you the payment is too small rather than showing a misleading result.

A worked example

Say you owe $18,000 at 9.5% APR and pay $400 a month:

Monthly rate: 9.5% ÷ 12 = 0.7917%
First month’s interest: 18,000 × 0.007917 = $142.50, so only $257.50 of your first $400 reduces the balance
Payoff time: about 56 months (4 years 8 months)
Total interest remaining: roughly $4,340

Now add $100 extra per month ($500 total). Payoff drops to about 43 months (3 years 7 months) and total interest to roughly $3,270 — the extra $100 a month saves about $1,070 in interest and 13 months of payments. Every one of those saved dollars is a guaranteed 9.5% return, which is hard to beat anywhere else with zero risk.

Practical tips

Confirm your APR, not just the payment. Statements bury the rate; the payment alone tells you nothing about cost. Two $400 payments on identical balances can hide wildly different rates and payoff dates.
Round up to a memorable number. If your payment is $387, paying a flat $450 is psychologically easier to sustain than “$63 extra,” and consistency matters more than optimization.
Make sure extra amounts hit principal. Some servicers apply overpayments to next month’s bill (advancing the due date) instead of reducing the balance. Ask for “principal-only” application — it’s the difference between saving interest and merely prepaying it.
Recheck after any rate change. If you have a variable-rate loan, a 2-point rate rise can add months to your payoff at the same payment. Rerun the numbers whenever your statement shows a new rate.

When a payoff date isn’t the right goal

If you’re juggling several debts, the order you attack them matters as much as the total you pay — that’s a different problem, solved by the debt snowball calculator, which compares payoff strategies across multiple balances. And if the loan in question is a mortgage, the mortgage calculator models the full amortization schedule including escrow-free principal-and-interest detail. This tool is the sharpest instrument for one loan, one payment, one clear finish line.

Frequently asked questions

Does this work for any type of loan?

It works for any simple-interest loan with monthly compounding and a fixed rate: personal loans, auto loans, student loans, and credit card balances you attack with a fixed payment. It does not model loans where the payment changes automatically, such as income-driven student loan plans or cards where you only ever pay the shifting minimum.

Why does the calculator say my payment never pays off the loan?

If your monthly payment is less than or equal to the interest the balance generates each month, the balance never shrinks. For example, $10,000 at 12% APR generates $100 of interest a month — a $100 payment covers only the interest, forever. The payment has to exceed the monthly interest for a payoff date to exist.

Where should the extra payment come from — and is it always worth it?

Extra payments earn you a guaranteed return equal to the loan's interest rate, because interest you don't pay is money you keep. Paying extra on a 9.5% loan is equivalent to earning 9.5% risk-free. It usually beats saving at lower rates, but fund an emergency buffer first — extra loan payments generally cannot be withdrawn if you need cash later.

Is the math different for credit cards?

The mechanics are the same, but card minimum payments typically decline as the balance falls, which stretches payoff for decades. This calculator assumes you keep paying a fixed amount even as any required minimum drops — the single most effective change most cardholders can make.

Does the calculator account for prepayment penalties or fees?

No. Most US personal and auto loans have no prepayment penalty, but some do — check your loan agreement for language like "prepayment charge". Late fees and one-time fees are also outside the model, since they depend on servicer behavior rather than the loan's math.

Balance over time