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.

Common mistakes

1. Entering a payment that doesn’t clear the interest. If the monthly payment is at or below balance × monthly rate, the balance never falls — the calculator flags this, but it’s worth checking by hand against the statement first.
2. Assuming extra payments automatically reduce the balance. Some servicers apply extra amounts to next month’s bill instead of principal unless you explicitly mark them “principal-only” — otherwise the interest savings shown here don’t materialize.
3. Ignoring a variable rate after it resets. A rate change on an adjustable loan changes the payoff math immediately; rerunning the numbers only at the original rate overstates progress.
4. Using this tool for a card paid at the shifting minimum. A minimum payment recalculates every month as the balance falls, which this fixed-payment model doesn’t capture — that scenario needs the credit card payoff calculator instead.

Practical tips

1. 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.
2. 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.
3. 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.
4. 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 amortization calculator models the principal-and-interest schedule and optional extra principal. This tool is the sharpest instrument for one loan, one payment, one clear finish line.