How much interest does early payoff save?

On a $20,000 personal loan at 12% for 5 years: paying off at month 24 saves approximately $2,400 in future interest. The savings are largest when the loan has the most time remaining.

How is the early payoff balance calculated?

The remaining balance = PV of remaining payments, discounted at the loan APR. Because of how amortization works, more principal remains after paying all that interest in early months.

Are there prepayment penalties on personal loans?

Some lenders charge 1-2% of the outstanding balance as a prepayment penalty. Always check loan terms. Federal credit union loans cannot have prepayment penalties by law.

Installment Loan Early Payoff Calculator

Calculate interest savings from paying off an installment loan early. Shows exact savings and remaining balance at any point in the loan term.

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Frequently Asked Questions

How much interest does early payoff save?

How is the early payoff balance calculated?

Are there prepayment penalties on personal loans?