Loan Payoff Calculator: Strategies for Paying Off Loans Faster

A loan payoff calculator helps you understand how extra payments can reduce your loan term and total interest paid. By making additional payments beyond your required monthly payment, you can pay off your loan years earlier and save thousands in interest. The key is applying extra payments directly to the principal balance, which reduces the amount of interest calculated on future payments.

Payoff Strategies: Making extra monthly payments reduces your principal balance faster, which means less interest accrues over time. For example, on a ₹10 lakh loan at 10% interest for 20 years, your regular EMI is ₹9,650. If you add an extra ₹2,000 per month, you'll pay off the loan in approximately 18 years instead of 20, saving about ₹2.3 lakh in interest. Biweekly payments (half your monthly payment every two weeks) result in 13 full payments per year instead of 12, effectively making one extra payment annually. Lump-sum payments (bonuses, tax refunds) can dramatically reduce your loan term when applied to principal.

Example: For a ₹10 lakh loan at 10% interest over 20 years, your regular EMI is ₹9,650, total interest = ₹13.16 lakh. If you add an extra ₹2,000 per month, your payoff time reduces to approximately 18 years, and total interest drops to ₹10.8 lakh, saving ₹2.36 lakh. Our calculator shows you exactly how much time and money you'll save with different extra payment amounts, helping you create a realistic payoff strategy that fits your budget.