Debt Payoff Calculators
Personal Loan Payoff Calculator
Every extra dollar of principal earns a guaranteed return equal to your interest rate — see exactly how much time and money extra payments or a lump sum actually save.
Calculate your payoff timeline
Compares your scheduled payoff against extra monthly payments and a lump sum.
Scheduled payoff
Minimum payment only
With extra payments
Extra + lump sum applied
Assumes extra payments and the lump sum go entirely to principal — confirm your lender applies them this way, since some servicers default to applying extra amounts toward future scheduled payments instead. Check for a prepayment penalty before sending a large payoff amount.
Extra payments are a guaranteed return
Every dollar of extra principal you pay eliminates interest you would otherwise owe on that dollar for the rest of the loan — which means an extra payment on a 12% loan effectively "earns" a guaranteed 12% return, since that's the rate you're not paying anymore. Few investments offer a comparable, risk-free return, which is exactly why extra payments toward a high-rate personal loan are usually one of the best uses of extra cash.
A worked example
Lump sum vs. extra monthly — which saves more?
A lump sum applied early saves more per dollar, since that money stops accruing interest immediately rather than gradually. Consistent extra monthly payments are easier to sustain and compound their benefit every single month. The strongest approach often combines both: a lump sum whenever one becomes available (a bonus, tax refund, or windfall), plus whatever consistent extra amount fits your budget month to month.
Check for a prepayment penalty first
Most personal loans from major national lenders don't charge a prepayment penalty, but it's not universal — some smaller banks and credit unions still include one. Before sending a large extra payment or a full payoff amount, confirm your loan agreement doesn't penalize early payoff, and request a dated payoff quote from your lender rather than estimating the exact final amount yourself, since interest continues to accrue daily between statements.
Make sure extra payments actually go to principal
- Confirm with your servicer that extra amounts are applied directly to principal, not held as an advance credit toward next month's scheduled payment — some servicers default to the latter unless you specify otherwise.
- Don't sacrifice your emergency fund to make extra payments — keep enough liquid savings that an unexpected expense doesn't force you back into new debt.
- Compare against other high-rate debt — if you're carrying credit card debt at a higher rate than your personal loan, that debt usually deserves the extra payment first.
Extra-payment and lump-sum payoff mechanics validated against the standard amortization formula, cross-checked with multiple independent personal loan payoff calculators. This is a planning estimate — a specific published example we compared against didn't fully reconcile with our own calculation, so the worked example above reflects our own validated figures rather than that source; confirm your exact numbers with your loan servicer.
Frequently asked questions
Before you accelerate a personal loan payoff.
Can I pay off a personal loan early without a penalty?
Usually yes — most large national personal loan lenders don't charge a prepayment penalty. Some smaller banks and credit unions do, so check your loan agreement before making a large extra payment.
Is a lump sum or extra monthly payments better?
A lump sum applied early saves more per dollar since it stops accruing interest immediately. Extra monthly payments are easier to sustain consistently. Combining both, when possible, maximizes the benefit.
Should I pay off a personal loan early or invest the extra money instead?
If your personal loan's rate is higher than what you'd reasonably expect to earn investing, paying it off early is the higher-return, lower-risk choice — extra principal payments effectively earn a guaranteed return equal to your interest rate.
Does my extra payment automatically go toward principal?
Not always — confirm with your loan servicer. Some default to holding extra payments as a credit toward your next scheduled payment rather than applying them directly to principal, which reduces the benefit significantly.
Should I pay off my personal loan or my credit card first?
Generally, pay off whichever has the higher interest rate first. Credit cards often run higher (commonly 15-25%) than personal loans (commonly 6-12%), which usually makes credit card debt the priority for extra payments.