What does this tool do?
Extra principal reduces the balance that future interest is charged on, so the loan clears sooner. This calculator compares the scheduled term with an accelerated one.
The Formula
Scheduled payment = P × r ÷ (1 − (1 + r)^−n); extra payments shorten the termFrequently Asked Questions
Should I invest instead of paying the loan early?
Compare the after-tax loan rate with a realistic return and your need for liquidity. Repaying reduces interest deterministically, while investment returns vary.
Why is the monthly saving larger later?
Interest is charged on the remaining balance, so extra principal early removes more future interest than the same amount paid near the end.