Extra Payment Loan Calculator – Monzi’s Guide

Calculate how an extra payment could change your loan with an extra payment loan calculator. Will you get out of debt sooner? Monzi’s here to break it down. Find out all the key details and factors you need to consider first. Let’s go.

Please note, certain ideas and products presented in this article may not be offered by Monzi nor the lenders we work with. This article presents only general information. Consider seeking professional financial, taxation, legal or other advice to check how the information and ideas presented on this website relate to your unique circumstances.

What is an extra payment?

An extra payment is simply an additional payment made alongside or between your regular loan repayments. In short, the goal of an extra payment is to shorten your loan period. By making an additional payment, you are able to pay off more of your outstanding balance so you can be debt free sooner.

Typically, extra payments relate to home loans, however, they might apply to personal loans as well.

If you think you’d like to make an extra repayment on your loan, first contact your lender to ensure it is possible under the terms of your contract. From there, they may amend your repayments to account for the additional payment that you’ve made.

But that’s not all you need to consider. There’s so much more. We’ll hopefully give you the tools to decide whether or not making an extra payment is the right decision for you. Let’s go.

How do extra payments affect loans?

In short, extra payments reduce your loan term. In other words, if you make an extra payment then your debt will be paid off sooner than it otherwise would be.

If you’ve got the cash available to cover an extra payment then it could be a handy option for you. After all, we all aim to be free from debt. Getting there sooner than you thought is an added bonus.

However, consider what you can afford before making any decision. Don’t sacrifice your savings simply to try and get out of debt early. This can have ramifications if you encounter an additional expense down the track.

Extra payment loan calculators

So, you want to make an extra repayment but you’re not sure how it will affect your loan. That’s where an extra payment loan calculator can be useful.

Do and quick search and you’ll find a host of lenders and financial institutions that may offer these resources for free. All you need to do is enter the details of your loan and you’ll get an estimate of how your loan may change.

Keep in mind that these online calculators only provide a guide. The true effect on your loan will be determined by your lender.

Can I make an extra payment on all loans?

In short, this may depend on your loan and lender. As a result, consult your loan contract or contact your lender for clarification. Typically, there will be an option for you to make an extra payment on most loans including:

  • Home loan/mortgage
  • Short term loan
  • Car loan
  • Debt consolidation loan
  • Small business loans.

However, again, contact your lender. They can give you a clear answer and may be able to run you through the required steps.

How do you calculate loan payoff with extra payments?

In short, use an extra payment loan calculator. After all, that’s what they do.

Not only are the free and easy, they’ll give you a clear idea of how your loan payoff will change with extra repayments.

As mentioned though, they are a guide. True changes may differ from those outlined by the calculator. As a result, keep this in mind before making an additional repayment.

Is it better to pay extra on principal monthly or yearly?

This is a great question. In short, should you make additional repayments each month or save it all and make one yearly payment?

As an example, should you make 12 x $100 additional monthly repayments or one $1,200 payment at the end of the year?

Ultimately, it won’t make a huge difference either way.

On the one hand, if you have the funds available then it may be better to pay as you go. That way, you can pay off more of your loan balance each month. This will in turn reduce the amount of interest that you pay.

On the other hand, any interest savings generated from paying monthly compared to annually will be minuscule. After all, we’re talking about a mortgage with a 20 to 30 year term.

As a result, decide which tactic is best for your circumstances. Also, keep in mind that additional payments are a luxury not a necessity. If you’re unable to make additional repayments that’s okay.

Do large principal payments reduce monthly home loan repayments?

Typically, no.

While extra repayments reduce your home loan balance, they will not alter your monthly payments. However, they will reduce the amount of interest that you pay.

So, what’s the benefit?

Ultimately, it’s about the long-term. While you won’t see any benefits today, extra repayments will reduce your loan term. For a 30 year mortgage with monthly repayments, you might end up paying off your loan in month 345 rather than month 360.

Why shouldn’t I pay off my loan early?

Ultimately, whether or not you pay off your loan early will be your decision. So long as you have the required funds, it’s possible to make a case for both sides.

Obviously, paying off your loan early means you’re free from debt. However, that’s not the only thing to consider. As a result, the argument for maintaining your current repayment schedule is as follows.

With a fixed term loan, your repayments are divided into a series of manageable amounts over a period of months or years. As a result, you know as long as you make your required repayments, you’ll pay off your debt without issue.

Given this, you can keep the additional funds in your savings. That way, they can be allocated elsewhere or saved for your next shortfall so you can avoid applying for an emergency loan in the future.

While this is the argument, it’s your choice. Decide what is best for your circumstances.

How can I clear a loan quickly?

If you have the cash available in your savings then the easiest way to clear a loan quickly is to make additional repayments. However, as discussed, this is not always the strategy.

Ultimately, it will come down to your financial situation and what is affordable for you.

One further thing to consider is that if you pay off your loan early then you may be charged an early exit fee by your lender. This is an additional cost that you will need to cover. As a result, read your loan contract to see if this is applicable to you.

For further tips on paying off a home loan early, visit the dedicated Moneysmart webpage. It will provide you with a range of useful tricks. Check it out.

Extra payment loan calculator abacus multicoloured

How can I lower my loan payments?

Before you agree to a loan, there are two ways that you can lower your regular loan repayments.

Firstly, you can select a longer term. If you are borrowing between $2,000 and $10,000 then lenders will likely offer repayment terms ranging from 13 to 24 months. With this, the longer your repayment term is, the more spread out your costs will be. This in turn reduces your regular repayment.

On the other hand, you could borrow less. This is self-explanatory. The less you borrow, the less you repay.

If, through the course of your loan, you find that your payments are no longer affordable, contact your lender. They may be prepared to work with you to develop a plan on how to alter your current repayments.

What should I consider before taking out a loan?

Before you begin worrying about finding an extra payment loan calculator, you first need to apply for a loan. While personal loans can be a manageable option to help cover an immediate expense, they’re not without their risks.

In short, poorly managed can lead to missed repayments, defaults or debt spirals all of which will have disastrous consequences for your credit score. More often than not, these result from individuals borrowing more than they can afford to repay.

That’s why before applying, it’s important to do a thorough financial assessment. As a guide, ask yourself the following:

  • What’s my income?
  • What are my expenses?
  • Do I have any outstanding debts or major, upcoming expenses?
  • What repayments could I afford?
  • Could I cut costs anywhere to reduce the amount I need to borrow?

Comparing personal loans

Once you’ve decided that a personal loan is right for you, the next step is to compare products. While you could accept any loan, if you shop around you can potentially score a better deal.

So, consider the following points during a personal loan comparison:

  • The interest rate, fees and charges: these will determine the amount you repay on top of the principal amount. Look for a lower rate and fewer fees.
  • Comparison rate: this combines your interest rate and fees to give you an idea of the total loan cost. In short, it provides an easy tool to compare lenders.
  • How much can you borrow: some lenders may specialise in small loans. If you’re looking for a large loan then you will need to consider this.
  • Repayment terms: can you tailor your repayments to suit your budget?
  • User reviews: compare past user experiences to get an idea of how they treat their borrowers.

Extra payment loan calculator: troubles with repayments

While you may be looking to make an extra repayment, it’s worth knowing what might happen if things go the other way.

If you are unable to afford an upcoming repayment then contact your lender directly. They may be prepared to work with you to develop a plan to manage the situation. However, it’s crucial to get in touch ASAP.

On a more extreme level, if you suffer a major change in circumstances that leaves you unable to afford your repayments then you will need to apply for financial hardship through your lender. As a part of this, you will need to supply some key information (e.g. an estimate of what you can afford).

Your lender will then consider your application and if you are approved, revised repayment terms may be implemented.

Personal loans and Monzi’s lender-finder service

If you’re hunting personal loans online then Monzi may be the simple and convenient choice. In short, we’re a lender-finder service. That means when you apply, we’ll aim to match you with an available lender in just 60 minutes.

Best of all, you can access cash loans ranging from $300 to $10,000. As a result, you might be able to cover almost any immediate cash now.

Not only that, it’s 100% online which means there’s no paperwork and you can apply at your convenience.

Scroll up and begin your application now.

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You won't use a penny to apply for our lender-finding service, but here's some costs you could expect from a lender

Loan amount

$300 - $2,000


12 months


20% upfront establishment fee

+ 4% monthly fee


Loan Amount of $1,000 over 6 months repayable weekly (25 weekly repayments). $1,000 (Principal Amount) + $200 (20% Establishment Fee) + $240 (fees based on 4% per month over 25 weeks) = $1,440 total repayable in 25 weekly installments of $57.60.

Under the current legislation, most small personal loan providers don’t charge an annual interest rate (you’ll know this as an APR) %. The maximum you will be charged is a flat 20% Establishment Fee and a flat 4% Monthly Fee. This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate

Loan amount

$2,001 - $4,600


13 months

24 months


48% annual percantage rate

67.41% comparison rate p.a.


Loan Amount of $3,000 over 18 months repayable weekly (78 weekly repayments). $3,000 (Principal Amount) + $400 (Establishment Fee) + $1,379.06 (reducing interest) = $4,779.06 total repayable over 18 months with weekly installments of $61.27.

The Interest Rate for Secured Medium Loans is 48%. The Typical Comparison Rate is 67.41% p.a. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Click here to see a worked example.

Loan amount

$5,000 - $10,000


13 months

24 months


21.24% annual percantage rate

48% comparison rate p.a.


Loan Amount of $10,000 over 24 months repayable weekly (104 weekly repayments). $10,000 (Principal Amount) + $5,577.12 (Interest) = $15,577.12 total repayable over 24 months with weekly installments of $149.78.

The Interest Rate for Secured Large Amount Loans is 48%. Maximum Comparison Rate is 48% p.a. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Click here to see a worked example.