Calculator · How much interest and time you save by adding to your regular loan payment.
Prepayment savings calculator
Enter your balance, rate and remaining term, then add an extra monthly amount or a lump sum to see the interest saved and the months taken off the loan.
Run the numbers
Some lenders charge a prepayment penalty, an administration fee, or limit how much you can prepay each year. Check your agreement before making a lump-sum payment.
How this works
Why prepayment is a guaranteed return
Every dollar of interest you avoid is a dollar you do not have to earn, and it is not taxable. No investment offers the same certainty as simply not owing the money, which is why clearing expensive debt is usually the strongest first move.
Why timing matters more than amount
Interest is charged on the outstanding balance, so a payment made earlier removes more future interest than the same payment made later. This is the same reason a lump sum early in a loan outperforms the same lump sum near the end.
What to check before you prepay
- Whether your agreement allows prepayment at all, and any annual limit.
- Whether a prepayment penalty or administration fee applies.
- Whether the extra payment is applied to principal rather than to future instalments.
- Whether you would be better off clearing a higher-rate debt first.
Where to send the money first
Direct extra money at the highest-rate debt you hold, after keeping a small emergency buffer. Paying down cheap debt while carrying expensive debt is a common and costly mistake.
Questions
Is prepaying better than investing?
Prepaying gives a guaranteed, tax-free saving equal to your interest rate. Investing may do better or worse. With high-rate debt, prepayment is usually the stronger starting point.
Will my lender allow it?
Most lenders allow some prepayment, but the terms vary: some set an annual limit, some charge a fee, and fixed-rate loans may carry a penalty. Your agreement states the rule.
Should I shorten the term or lower the payment?
Keeping the payment the same and shortening the term saves the most interest. Lowering the payment extends the debt, which is usually the opposite of the goal.
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We match, we do not lend. No amount, term or rate is promised on this page — the calculator only models the numbers you entered.
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Lending rules and benchmark rates
The sourced rules these calculators assume.
Sources
- Financial Consumer Agency of Canada — debt and borrowing —
- Payday Lending Regulations, SOR/2024-114 —
- OSFI Guideline B-20 —
Every figure on this page is attributed to the publisher above. Where a value could not be verified against the publisher's own publication, it is left out rather than estimated.