Compare a baseline with a fixed extra monthly amount
The baseline uses the entered base amount, rate, term and fees with no extra payment. The alternative retains those same assumptions and adds the extra amount you enter after each regular monthly payment. Payments cap at principal plus the interest charged for that month, so the final extra may be smaller than requested.
Both schedules deliver the same initial net cash. The result shows the change in payoff month, total interest and full financing cost. Fees remain part of both schedules; an upfront charge is not erased by paying the loan early. Because the fees are spread over a shorter borrowing period, an annualized cash-flow rate can increase even while total interest decreases.
Read the schedule, not just the saving
Each monthly row separates regular and extra amounts. Principal paid equals total payment less that month’s interest. Opening principal plus interest less total payment equals closing principal. The alternative stops once principal reaches zero, rather than continuing to count extra payments after payoff.
The comparison horizon uses the same numbered month for both paths. If the extra-payment path has ended earlier, its remaining debt is zero. The baseline can still have principal outstanding. That difference is included in the horizon cost instead of being lost when only prior cash payments are compared.
Confirm the contract permits the assumed timing
The model assumes an extra is applied to principal at the same monthly payment event and that immediate settlement has no penalty. It does not model a lender treating the money as a future instalment, daily interest between payment dates or a prepayment charge. Check the contract and servicing instructions before using the result to schedule a real payment.
The tool also does not evaluate emergency reserves, competing investments or the effect on household affordability. Use a payment amount that reflects your own available budget. Its saving is conditional on making the modelled payments under unchanged rates and fees.
Limits shared by these schedules
Interest uses annual rate divided by twelve and monthly cent rounding. There is no daily accrual, variable rate, payment deferral, insurance, tax, delinquency cost or prepayment fee. The first due date labels equal monthly periods; it does not introduce an odd first-period interest calculation. Use the original quotation and payoff statement for contractual amounts.
Sources and definitions
The CFPB explains fees on personal instalment loans, why a monthly payment alone is insufficient for comparison and the distinction between interest and APR. These support the borrowing concepts. The specific monthly rounding, cash-flow rate calculation and invented examples are the original AllMarkets model, not a lender quote or a certified regulatory disclosure.
Read exact formulas and verification · Compare all four tools