Method
Base monthly payment uses the standard amortization formula for the loan amount, annual rate and term in years. The payoff simulation then pays base payment + extra payment every month, charging interest of (annual rate / 100 / 12) on the remaining balance.
The result shows the number of months to pay off with the extra payment and the total interest paid under that schedule.
Worked example
| Loan amount | $18,000 |
|---|---|
| Annual rate | 8.5% |
| Years | 5 |
| Extra payment | $75 |
| Base monthly payment | $369 |
| Payoff with extra | 4y 0m |
| Estimated interest | $3,291 |
Assumptions and limits
- Assumes a fixed rate and equal monthly payments; variable rates, fees and insurance are not included.
- Interest shown is for the extra-payment schedule, not for the original term.
Educational estimate only. It is not financial, tax, legal, or investment advice.