Extra Debt Repayment Comparison Calculator

How the extra debt repayment comparison calculator works

Both schedules start with the same principal and fixed regular payment. The rate is nominal annual rate ÷ 12, interest accrues on the opening cent balance, payments occur at month end, and the final payment clears the remaining balance. Interest and payments round half-up to cents.

The alternative adds the entered extra amount each month after interest is covered. It stops charging payments after principal is zero. The entered flat prepayment charge applies once when positive principal and positive extra payments are modeled; the fee is paid separately and not financed. Net cost saving is baseline interest less alternative interest and that fee.

A shorter payoff is not necessarily a net saving. The tool does not establish that prepayment is permitted, implement a percentage penalty, compare investment returns, calculate tax or model daily interest. Confirm the actual contract and choose the fee that fits the scenario.

Worked example

A 1,000 zero-interest balance over four months has regular payments of 250. Adding 250 per month clears it in two 500 payments. Interest is zero in both cases; a 10 prepayment fee makes net cost saving −10. Removing that fee makes the cost difference zero while retaining the faster payoff.

Sources and assumptions

The source material explains the underlying calculation or pricing structure. Entered prices, costs, schedules and scenario choices are your assumptions; this tool does not obtain supplier quotes or predict actual results.

• Microsoft: fixed periodic payment convention