Q:

How do you use an early payoff calculator?

A:

Quick Answer

Use an early payoff calculator by inputting the number of months remaining on the loan, the loan amount and the annual interest rate. Hit the "Calculate" button to find out how increasing payments can save money in the long run by paying off the loan early.

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Full Answer

Several websites provide early payoff calculators to their customers. Borrowers can use these calculators to determine how much they can save by making a small additional monthly payment on their loan, toward the principal, to help them pay it off faster, saving money on interest fees.

One easy-to-use site that provides an early payoff calculator is Bankrate.

  1. Visit the website
  2. Visit the Bankrate website and click "Calculators" at the top of the page.

  3. Click "Early Payment Calculator"
  4. Toward the middle of the page, click "Early Payment Calculator."

  5. Enter the necessary information
  6. Enter the number of months remaining on the loan, the original loan term, amount, any additional payment and the annual interest rate.

  7. Click "Calculate"
  8. Click "Calculate" to see the results.

After clicking "Calculate," the top of the box shows how long the repayment is shortened by and under that, the total savings. The bottom of the box displays a graph that shows the difference between making regular payments and adding on a few more dollars each month.

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