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Compare scheduled payments with extra principal

Compare the same fixed-rate loan with and without a monthly extra principal payment. Amounts are displayed in USD; interest is calculated monthly. The comparison helps inspect this model and is not personal financial advice.

Make the two scenarios comparable

1. Open Loan Calculator and enter the loan amount, annual interest percentage and term in months.

2. Set extra principal to 0, calculate and record monthly payment, total interest and payoff months.

3. Change only the extra monthly amount, calculate again and compare.

4. Expand or export the schedule to confirm when the balance reaches zero and how the last payment changes.

A reproducible twelve-month example

For USD 12,000 at 6% annual interest over 12 months with no extra payment, scheduled payment is USD 1,032.80 and total interest is USD 393.57. First-month interest is USD 60.00 and closing balance USD 11,027.20. These are model results rounded for display, not an offer from a lender.

Add USD 100 each month

With the same inputs and USD 100 extra principal, the first ten payments are about USD 1,132.80. The loan finishes in month 11 with a final payment of about USD 1,032.54. Modelled total interest is USD 360.51: USD 33.05 less than the baseline, with one month saved. The last payment is capped at the remaining amount due, so it need not equal the regular payment plus USD 100.

How the model applies the extra amount

Interest is calculated on the opening balance, then the scheduled payment and extra amount reduce what is due. The next month starts with the smaller balance. The same scheduled principal-and-interest payment is retained; no refinancing, new contract or lender recast is simulated. At 0% interest, USD 12,000 over 12 months has a USD 1,000 scheduled payment and no interest saving to calculate.

Check the contract as well as the arithmetic

Confirm that your servicer applies extra funds to principal and whether it needs instructions. Some mortgage contracts have prepayment charges; review the CFPB explanation and your own contract. Such charges, other fees, taxes and insurance are not part of this simple loan comparison. A lower modelled interest total alone does not establish the best choice for your finances.

Read rounded results carefully

The engine does not round the running balance to cents each month. Screen amounts are rounded, so adding displayed rows can differ by a few cents from totals calculated with full precision. Keep all other inputs identical when comparing and retain the original schedule if you need to discuss it with your lender.

Sources and references

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