Loan & Amortization Methodology

For a positive APR, the scheduled payment uses the standard installment-loan formula:

P is the original principal, r is APR divided by 12 and by 100, and n is the number of monthly payments. At 0% APR, principal is divided evenly across the term.

Each month, interest is calculated from the outstanding principal using the monthly rate and rounded to the nearest cent. The scheduled payment is applied to interest first and then principal. Any recurring extra payment and one-time lump sums are applied to remaining principal after the scheduled payment.

Currency amounts are rounded to cents at each payment step. The final scheduled payment is adjusted when necessary so the ending balance is exactly zero instead of leaving a fraction-of-a-cent residual.

Extra principal is capped at the remaining balance, so the model never reports negative principal or an overpayment beyond payoff. The yearly table reports scheduled principal and extra principal separately so its total-payment columns reconcile without double-counting extra payments.

The scheduled plan removes every extra payment and calculates the original amortization schedule. The accelerated plan uses the same loan terms plus your recurring and one-time extra principal. Interest saved is the scheduled plan's total interest minus the accelerated plan's total interest. Time saved is the difference in payment counts.

The first payment month is treated as the first amortization period shown in the schedule. One-time payments must fall within the original scheduled loan term and are matched to their selected calendar month.

If recurring or earlier extra payments cause the loan to be paid off before a later one-time payment is reached, that later payment is not applied. The calculator flags those planned payments so you can move or remove them if desired.