How extra payments shorten a loan and cut interest.

Why extra payments help

On a fixed-rate loan, interest is charged on the remaining balance. When you pay down the balance sooner, each later month has less balance to charge interest on, so more of every regular payment goes to principal.

Test your own numbers

Open the Loan calculator, enter the amount, rate and term, then add an extra monthly payment. Compare the total interest and payoff time with and without it. You can download a repayment schedule to see each month.

Check your loan terms first

Some lenders charge a prepayment penalty or apply extra money to the next payment instead of the principal. Read your agreement or ask the lender how extra payments are applied.

Comparing two offers

If you are choosing between loans, use Loan comparison to see monthly payments and total cost side by side, including upfront fees.

These tools give estimates. Your lender’s figures are the ones that count.