David is a Chartered Financial Analyst and a debt management expert specializing in accelerated payoff strategies and consumer finance.
This 4-in-1 Loan Payoff calculator helps you plan your debt-free date. Enter any three values—Loan Amount, Annual Rate, Monthly Payment, or Term—and we will solve for the fourth.
Loan Payoff Calculator
Loan Payoff (Amortization) Formulas
i = R / 12 / 100 (Monthly Rate)
n = T * 12 (Number of Months)
Solve for Monthly Payment (M):
M = P * [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
Solve for Loan Amount (P):
P = M * [ (1 + i)^n – 1 ] / [ i(1 + i)^n ]
Solve for Term (n):
n = log( M / (M – P*i) ) / log(1 + i)
Solve for Rate (i):
(No direct formula; solved iteratively)
Formula Variables
- (P) Loan Amount: The current principal balance you owe on the loan.
- (R) Annual Rate: The Annual Percentage Rate (APR) you are paying.
- (T) Loan Term: The remaining number of years to repay the loan.
- (M) Monthly Payment: The fixed monthly payment you are making.
Related Calculators
- Loan Repayment Calculator
- Personal Loan Calculator
- Debt to Income (DTI) Calculator
- Loan Affordability Calculator
What is a Loan Payoff Calculator?
A loan payoff calculator is a financial tool designed to show you how any amortized loan—such as a mortgage, auto loan, or personal loan—is paid down over time. Its primary purpose is to help you understand your loan’s structure and, more importantly, how to pay it off faster.
By using the standard amortization formula, this calculator can help you see the relationship between your loan’s four main variables: principal, interest rate, term, and payment. Small changes to one variable can have a major impact on the others. For example, a slightly higher monthly payment can shave *years* off your loan term and save you thousands in interest.
This 4-in-1 calculator is a powerful strategic tool. You can solve for (T) Term to see your “debt-free date” and find out how much sooner you’d pay off the loan by increasing your (M) Monthly Payment. You can also solve for (P) to see how a new payment would affect your principal, or (R) to see the impact of refinancing to a new rate.
How to Calculate Your Loan Payoff (Example)
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Identify Loan Variables
You have a student loan and want to pay it off in 10 years:
• Loan Amount (P): $25,000
• Annual Rate (R): 6.8%
• Loan Term (T): 10 years -
Convert to Monthly Terms (i, n)
The formula uses monthly values:
• Monthly Rate (i): 6.8% / 12 / 100 = 0.005667
• Number of Months (n): 10 years * 12 = 120 -
Choose the Payment Formula
Use the standard formula to solve for Monthly Payment (M):
M = P * [ i(1 + i)^n ] / [ (1 + i)^n – 1 ] -
Calculate the Monthly Payment
Plug in the monthly values:
• Numerator: 0.005667 * (1 + 0.005667)^120 = 0.01117
• Denominator: (1 + 0.005667)^120 – 1 = 0.9705
M = $25,000 * [ 0.01117 / 0.9705 ]
M = $25,000 * 0.01151 = $287.75
Your monthly payment for a 10-year payoff will be $287.75.
Frequently Asked Questions (FAQ)
How can I find my payoff term if I add extra?
Enter your (P) Loan Amount, (R) Annual Rate, and your new, higher (M) Monthly Payment. Then, leave the (T) Loan Term field blank and click calculate. The calculator will solve for (T) and show you how many years/months it will take to pay off the loan.
What is the “avalanche” vs. “snowball” method?
The “avalanche” method (mathematically best) involves paying extra on your highest-interest-rate (R) loan first. The “snowball” method (psychologically motivating) involves paying off your smallest-balance (P) loan first. Both methods work and are great strategies.
Should I pay off my loan early?
It depends. If your loan’s interest rate (R) is high (e.g., >8%), paying it off early is a guaranteed, risk-free “return” on your money. If your rate is very low (e.g., <4%), you might earn a higher return by investing your extra cash instead of prepaying the loan.
What is a “re-amortization” or “recast”?
If you make a large lump-sum payment on your loan, some lenders allow you to “recast” the loan. This keeps the same term (T) and rate (R), but re-calculates a new, lower monthly payment (M) based on the new, lower principal (P). This calculator can help you model that scenario.