The allure of paying off your loan on time and being completely debt free faster than you initially thought is one that is really appealing. Paying off your loan on time not only frees you from debt but you can end up saving a lot of money on your interest. You might start your repayments by rounding up your payments to the nearest whole figure if you cannot add much to your fees. A little addition like this can end up saving you from paying up to four or five payments at the end. The money you save might not look like much when you start off but it really adds up over time and accrues to a lot at the end of your loan payment.
Before deciding to make extra repayments ensure that you speak to your lender to find out their rules and principles on repayments. Some companies attach penalties for prepayments, they could also limit the number of repayments you can make or attach it to your next payment instead of to your principal amount.
Our extra repayment calculator is easy to use and helps you estimate the amount of money you are going to end up saving if you decide to include extra money.
- To determine the repayment figures you need some important figures from your loan term. They include
- Loan Amount: This is not the amount left on your loan to pay up
- Interest Rate: this is the rate at which you pay off your loan usually calculated in percentages
- Loan Term: this is the total amount of time left on your loan
- Repayment Frequency: this is the cycle in which you pay your loan and it could be weekly, fortnightly or monthly.
- Extra amount: the extra amount you want to per pay per cycle
- Starts after: the time you begin to pay extra
- After you input all the requirements the calculator does its job and gives you the following,
- Minimum Repayments: how much you paid before
- Increased Repayments: how much you have to pay now
- Time saved: this is time going to save on your original loan term
- Interest Saved: this is the total amount you end up saving with your new terms