$
%
$
$
Payoff time5y 9m
Total interest$16,000
Total paid$41,000
The split
Principal 61%Interest 39%

Balance over time

Now5y 9m

Yearly breakdown

YrPrincipalInterestBalance
1$2,701$4,499$22,299
2$3,258$3,942$19,041
3$3,930$3,270$15,111
4$4,741$2,459$10,370
5$5,719$1,481$4,651
6$4,651$349$0

The formula

balancen+1=balancen(1+r)−payment\text{balance}_{n+1} = \text{balance}_n(1 + r) - \text{payment}

How it works

Each month interest is added to your balance and your payment is subtracted. Anything above the interest chips away at principal — so even small extra payments can shave months or years off the payoff date.

FAQ

Why won’t my balance ever clear?

If your payment is smaller than the monthly interest, the balance grows. Raise the payment above the interest to make progress.

Do extra payments really help?

A lot — extra money goes straight to principal, which lowers every future interest charge.

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How the payoff time is worked out

Each month, interest is added to your balance and your payment is subtracted. Whatever is left after covering the interest reduces the principal. The calculator repeats this month by month until the balance reaches zero, counting how long it takes and totalling the interest paid along the way. Each month balancen+1=balancen(1+r)−payment\text{balance}_{n+1} = \text{balance}_n(1+r) - \text{payment}, where rr is the monthly rate.

Why extra payments help so much

Because interest is charged on the remaining balance, every extra amount of principal you pay today removes interest from every future month. Even a small recurring overpayment can cut years off the payoff date and save a large sum in interest, especially on high-rate debt like credit cards.

When a loan never pays off

If your monthly payment is smaller than the interest charged that month, the balance grows instead of shrinking and the loan never clears. The calculator flags this so you can raise the payment above the monthly interest.