See how extra payments can reduce interest and shorten your loan.
Details: This calculator estimates a reducing balance loan, where interest is calculated from the remaining principal. It can be used for mortgages, car loans, personal loans, or other loans with monthly repayments.
It compares the normal repayment plan with an extra monthly payment, so you can see estimated interest savings and how many months or years you may pay off the debt sooner.
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amount
%/year
years
amount
Interest saved0amount
Paid off sooner0compared with no extra payment
Normal monthly payment0amount/month
Total interest without extra0amount
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Compare before and after extra payments
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Remaining debt chart
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Plain-language summary
The explanation will appear after you enter your numbers.
Month
Total paid
Principal
Interest
Remaining balance
What is a reducing balance loan?
A reducing balance loan calculates interest from the remaining principal. As the principal gets smaller, the interest charged in later months usually gets smaller too.
For example, if your normal payment is 10,000 but you pay 12,000, the extra 2,000 helps reduce principal faster. This may lower total interest and shorten the loan.
Are extra payments worth it?
Extra payments are often useful when the loan interest rate is higher than the low-risk return you could earn elsewhere. Reducing loan interest is a clear saving.
Still, keep an emergency fund first. Avoid using all your cash to pay down debt if it leaves you with no backup money.
Note
This result is an estimate. It assumes the interest rate stays the same and does not include fees. Real loan terms can differ, including variable interest, early payoff fees, or bank rules for extra payments.