Loans · Canada
Early loan payoff calculator.
See how an extra monthly amount or an annual lump sum reduces total interest and clears your loan faster. Compare your current plan to an accelerated one side by side.
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The power of extra payments
Paying off debt early is one of the highest-return moves you can make. Extra payments go directly to principal, reducing the balance faster and saving thousands in interest over the life of the loan.
Why extra payments work
Your regular payment splits between interest and principal. Early in the loan, most of it goes to interest. Extra payments reduce principal immediately, so less interest accrues in future months — which means more of each regular payment also goes to principal. The effect compounds.
Strategies for early payoff
- Bi-weekly payments: pay half your monthly payment every two weeks (26 half-payments = 13 full payments per year).
- Round up: round payments to the nearest $50 or $100.
- Windfalls: apply tax refunds, bonuses, or gifts directly to principal.
- Side income: dedicate a side hustle entirely to debt payoff.
Things to check first
- Verify no prepayment penalties in your loan agreement.
- Confirm extra payments are applied to principal, not future payments.
- Keep 3 to 6 months emergency fund before aggressive payoff.
- Consider whether investing may beat the loan rate (rare below 3%).
- Max out any employer RRSP match before extra debt payments.
Disclaimer
This calculator provides estimates. Actual savings depend on loan terms, prepayment policies, and consistent extra payments. Always verify prepayment rules with your lender before making extra payments.