Business Loan Payoff Calculator: Extra Payments and Early Payoff
See how much you might save in interest by making extra payments on your small-business loan, or by paying it off early.
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Making extra payments on a small-business loan or paying it off entirely can help you save on interest and get out of debt faster.
For example, if you have a $50,000 loan with a 12% interest rate and monthly payments of $1,200, you could save more than $3,000 in interest and shave a year off your loan’s term by paying an extra $250 each month. And if you pay off the full balance instead, you could potentially save around $15,000 in interest.
Use our business loan payoff calculator to see how extra payments or an early payoff can help you cut down on loan costs.
How much do you need?
We’ll start with a brief questionnaire to better understand the unique needs of your business.
Once we uncover your personalized matches, our team will consult you on the process moving forward.
How to use our business loan payoff calculator
1. Select your goal
Make extra payments. If you have some extra cash you’d like to put toward your loan, selecting this option will show you how much you could save in interest and how much faster you might pay it off.
Pay off your loan balance early. If you have enough to pay off your entire balance, selecting this option will show you how much you could save in interest.
2. Enter your current loan details
These fields apply to both goal options:
Current loan balance. Enter the amount you still owe on your business loan.
Annual interest rate. If you don’t remember off-hand, you can usually find this on your monthly statement or by logging in to your lender’s online portal.
Payment frequency. Select how often you make loan payments (monthly or weekly).
Current payment. Enter the amount you’re required to pay each month or week.
Prepayment penalty. Some lenders charge this fee for paying off your loan early or making payments ahead of schedule. If your lender is one of them, you might expect to pay 1% to 5% of the loan balance. Check your loan agreement or contact your lender to see if your loan has a prepayment penalty.
3. Add details for your selected goal
If you chose “make extra payments,” enter:
Next loan payment date. Select the date your next loan payment is due.
Extra payment. Enter the extra amount you want to pay on a recurring basis, or enter $0 if you just want to test a one-time payment. This amount goes straight to paying down your loan’s balance.
One-time extra payment. Enter any lump-sum payment you want to make in addition to your regular payment. Like extra payments, this amount will go straight toward paying down your balance.
If you chose “pay off my loan balance early,” enter:
When you want to pay it off. If you select a future date, you’ll also be asked to enter your next loan payment date.
4. Calculate your results
After you hit “calculate,” you'll see how much money and time you can save by making extra payments or paying off your loan early.
If you chose extra payments as your goal, you’ll also see a chart and downloadable amortization schedule showing how extra payments could impact your repayment timeline.
Use these results to determine whether potential savings is worth using extra cash to pay down a loan.
If you want to save on interest but don’t have much room in your budget for extra payments, you may still be able to save by refinancing your business loan. Use our business loan refinance calculator to see how the numbers compare.
4 factors to consider before paying down your loan
The idea of saving on interest or getting out of debt sooner might be appealing, but paying down your business loan isn’t always the best move.
Before putting extra cash toward your loan, consider the following:
Do you have enough set aside for emergencies? If you don’t have at least three to six months’ worth of operating expenses set aside for a rainy day, it may be worth building up your emergency fund first.
Will extra payments strain your cash flow? Make sure you can comfortably cover recurring business expenses and planned purchases before paying more than required on a business loan.
Does your lender charge a prepayment penalty? If so, potential cost savings might not be worth it, especially for low-interest rate business loans or short-term loans. For example, if you pay off a $30,000 loan with a 7% interest rate, $2,500 monthly payments and a 4% prepayment penalty, you could owe more in prepayment fees than you’d save in interest. Our calculator will let you know if your prepayment penalty will be higher than potential interest savings.
Could the money be better spent elsewhere? Consider the opportunity cost of paying down a small-business loan. For example, can you use this money to generate greater returns elsewhere in your business, like by hiring another employee or by investing in a new piece of equipment? If so, you might want to think twice about making extra payments or paying off your loan early.
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