Extra payments go 100% to principal — and every future interest charge shrinks because of it. Drag the green slider and watch.
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Loan Details
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You will pay in interest
$0
on a loan over
· payment /mo
principal
interest
Principal Interest
Total paid
—
Payoff date
—
P>I crossover
—
⚡ What if you paid extra?
save $0
—
Where every dollar paid has gone — principal vs interest
Year
Principal
Interest
Cum. Interest
Balance
Beat the bank with pocket change
A unit converter for small
money — no lifestyle advice implied. Check anything you might redirect (or edit the
amounts) and watch it land on the schedule above, on top of whatever the slider
already says. Prefer to invest it instead? Referee that here.
Each line shows what checking it would take off the
bank's total, computed live against your loan above.
Why extra payments punch above their weight
Interest is charged on your remaining balance. An extra $300 this month doesn't just
save the interest on $300 once — it removes that $300 from every single interest calculation
for the rest of the loan. On a fresh 30-year mortgage, the leverage is enormous: a dollar of
extra principal in year one can save more than a dollar of interest over the loan's life.
The dashed green line on the chart is your loan with extras; the gap between it and the red
line is money that stays yours.
Frequently asked questions
How do extra payments reduce interest?
Every extra dollar goes straight to principal. All future interest is computed on that smaller balance, so one early extra payment keeps saving for the life of the loan.
Is it better to pay extra monthly or one lump sum?
Earlier is better: a lump sum today beats the same total spread over years, because it shrinks the balance sooner. Monthly extras are powerful because they compound this effect every month.
Should I pay extra or invest the money instead?
Paying extra earns a guaranteed return equal to your loan rate. Whether investing beats that depends on returns and risk tolerance — this tool gives you the guaranteed side of the comparison.
Will my lender apply extra payments correctly?
Specify 'apply to principal' explicitly. Some servicers otherwise treat extras as early payment of next month's bill, which saves nothing.