Accelerating principal reduction
The scheduled payment is calculated from the original balance, rate, and term. The chosen extra amount is added directly to principal every month, then the accelerated balance is simulated beside the original schedule. Interest falls because later monthly charges use a lower balance.
The default extra-payment result
For $250,000 at 6.25% over 30 years, adding $200 each month produces payoff in 266 months. That is 94 months sooner than the 360-month schedule and saves about $91,827.71 of modeled interest.
How the servicer must apply extra cash
The model assumes the lender applies every extra dollar immediately to principal and leaves the required payment unchanged. Some servicers advance the due date instead, hold funds until a scheduled payment, or need explicit instructions before crediting principal.
Why earlier additions matter more
An extra payment is most powerful early because it removes balance before many future interest periods. Sending the same total near the end of the loan still lowers interest, but it cannot erase the interest already paid in earlier years.
Changes not in the schedule
Prepayment penalties, annual limits, escrow changes, recasting, and a refinance are outside this schedule. An irregular lump sum needs a dated calculation because its effect depends on when the balance is reduced.
Confirming a principal-payment plan
Use this page to compare a recurring principal plan with keeping the cash for another priority. Confirm the servicer's payment instructions and retain proof that the additional amount was posted to principal.
Recurring extra cash versus a lump sum
The displayed 94-month improvement assumes $200 arrives every month from the first payment onward. A one-time $2,400 payment has a different effect because its timing changes how many future interest periods see the lower balance. Use a dated amortization schedule when cash will arrive irregularly, and do not claim the recurring result for a plan that is only occasional.
Check the statement after the first extra payment
The balance reduction should be visible in the next transaction history. If it is not, contact the servicer before assuming later extra payments will deliver the modeled interest saving.
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It is an educational estimate, not financial, tax, or legal advice.