Every extra amount you pay on a loan goes straight to principal — and every dinar of principal you kill early stops earning interest for the bank. This calculator quantifies that: enter your loan and either a monthly top-up or a one-time lump sum, and see the interest saved, the months cut off the term, and the new payoff date.
Fill in the loan, rate, term and the extra amount.
Informational calculation of the term-shortening variant — not financial advice. Banks may charge a capped early-repayment fee (check your contract); it is not included here.
How it works
The math replays your amortization schedule with the extra payments applied: each month interest accrues on the (now smaller) balance, so the same contractual installment repays more principal, and the loan simply runs out of balance early. On 20,000 at 6% for 5 years, an extra 100 per month saves 754.99 of interest and ends the loan 13 months sooner — in 47 months instead of 60.
This models the term-shortening variant (in Serbian banking, “skraćenje roka”): your installment stays the same and the loan ends earlier. The alternative — keeping the term and lowering the installment — saves noticeably less interest, because the balance stays higher for longer.
Timing matters for lump sums: the same 2,000 paid in month 12 of that loan saves 506.17, but paid in month 36 only 227.46. Interest lives at the front of the schedule, so early money works hardest.
Practical examples
A 100 monthly top-up on a 20,000 loan
At 6% for 5 years the base interest is 3,199.35. Adding 100 each month cuts it to 2,444.36 — 754.99 saved, or 23.6% of all interest — and the loan closes in month 47 instead of 60.
A bonus as a lump sum: when to pay it?
On the same loan, 2,000 paid in month 12 saves 506.17 and 6 months; the identical 2,000 in month 36 saves 227.46 and 5 months. If you have the money, earlier always beats later.
A small top-up on a mortgage
On 96,000 at 4.9% for 25 years, just 50 extra per month saves 11,821.65 of the 70,687.48 base interest and shortens the loan by 44 months — over three and a half years — to 256 months.
Deciding between saving and repaying
Run your loan here, then the same monthly amount through our compound-interest calculator at your savings rate. Whichever number is bigger wins — with loan rates above deposit rates, repayment usually does.
Frequently asked questions
Where does the saving actually come from?
From interest never charged. Interest accrues on the outstanding balance each month; extra payments shrink that balance ahead of schedule, so every following month charges less. Nothing is discounted or refunded — the loan simply has less debt to charge interest on.
Term shortening or lower installment — which does this compute?
Term shortening: the installment stays contractual and the loan ends early. It is the variant that saves more interest. If your bank instead lowers the installment and keeps the term, your saving will be smaller than shown here.
Can the bank charge a fee for early repayment?
In Serbia, consumer-protection rules cap early-repayment fees (typically up to 1% of the prepaid amount, and 0% in many cases, e.g. variable-rate housing loans). The fee is not included here — subtract it from the shown saving, and check your contract for the exact clause.
Is it worth overpaying a loan that is almost repaid?
Usually not much — late in the schedule the installments are already mostly principal, so there is little future interest left to save. The month-36 vs month-12 lump-sum example shows the drop-off. Early in the loan, overpaying is at its most powerful.
Should I repay the loan or invest the money instead?
Compare rates: repaying a 6% loan is a guaranteed, tax-free 6% return on the money. An investment must beat that after tax and risk to win. For most household loans the repayment wins; for very cheap subsidized loans it may not. This tool gives you the loan side of that comparison exactly.
What if I can only pay extra occasionally, not every month?
Model each occasional payment as a lump sum in its month and add up the savings — the sum is a close approximation. The monthly mode assumes a steady top-up every single month, which is the stronger commitment.
Why does the percentage saved differ from the months saved?
They measure different things: interest saved is money, months saved is time. A small top-up late in a long loan can cut several months while saving modest interest, because the final installments contain almost no interest to begin with.
Do my loan numbers stay private?
Yes — everything is computed in your browser. Nothing you type is uploaded, and analytics never receives amounts.
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