Home
Back
Loan Payoff Formula:
| From: | To: |
The Home Equity Loan Calculator With Extra Payments helps you determine how quickly you can pay off your home equity loan by making additional payments beyond the regular monthly amount. This calculator shows the significant time and interest savings possible with extra payments.
The calculator uses the loan payoff formula:
Where:
Explanation: This formula calculates the exact number of months needed to pay off a loan when making fixed monthly payments, accounting for compound interest.
Details: Making extra payments on your home equity loan can significantly reduce the total interest paid and shorten the loan term. Even small additional payments applied to principal can have a substantial impact over time.
Tips: Enter your current loan balance, annual interest rate, regular monthly payment, and the extra amount you plan to pay each month. Ensure all values are positive and the total payment exceeds the monthly interest charge.
Q1: How much can I save with extra payments?
A: Depending on your loan terms, extra payments can save thousands in interest and reduce your loan term by several years.
Q2: Should I make extra payments or invest the money?
A: This depends on your loan interest rate vs. expected investment returns. Paying off debt provides a guaranteed return equal to your interest rate.
Q3: Are there penalties for early payoff?
A: Some loans have prepayment penalties. Check your loan agreement before making extra payments.
Q4: How are extra payments applied?
A: Extra payments typically go directly toward reducing the principal balance, which reduces future interest charges.
Q5: What if I can't make extra payments every month?
A: Even occasional extra payments help. Consider making lump-sum payments when you have extra funds available.