Loan Early Payoff Calculator
Calculate how much you save in interest by paying off a loan early with a lump sum.
Enter your values and click Calculate
A one-time lump sum payment directly reduces your outstanding principal, which cuts every future month's interest charge and shortens your total payoff timeline. Common sources for lump sums include tax refunds, work bonuses, inheritance, or the proceeds from selling an asset. This calculator lets you compare your loan's current trajectory against the scenario where you apply a lump sum today — showing the exact interest saved, months eliminated, and new payoff timeline. Even a modest lump sum can have an outsized impact if applied early in the loan, because interest compounds on the remaining balance for fewer months. The results help you decide whether paying down debt or investing the money is the better financial move.
How It Works
Both the original and lump-sum scenarios are simulated month by month. Each month, interest is calculated as balance × monthly rate, added to the balance, and then the monthly payment is subtracted. The simulation continues until the balance reaches zero, accumulating total interest. In the lump-sum scenario, the starting balance is reduced by the lump sum before simulation begins. Interest saved = original total interest − new total interest. Months saved = original payoff months − new payoff months.