Find out exactly how long it takes to pay off any loan — and how much extra payments save you.
| Year | Principal Paid | Interest Paid | Balance |
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Extra payments can save thousands in interest and shave years off your loan, especially early in the loan when more of each payment goes to interest. Even $50–$100/month extra on a car loan or personal loan can cut months off the payoff timeline and save hundreds in interest charges.
A general rule: if your loan's interest rate is higher than what you'd earn investing (roughly 7–8% for stocks), paying off debt is the better return. High-interest debt like credit cards (15–25%) should almost always be paid off aggressively before investing beyond any employer 401k match.
The avalanche method targets the highest-interest debt first (mathematically optimal — saves the most money). The snowball method targets the smallest balance first (psychologically rewarding — builds momentum). Both work; the best method is whichever keeps you motivated to stick with it.
Yes. Paying half your monthly payment every two weeks results in 26 half-payments per year — the equivalent of 13 monthly payments instead of 12. That extra payment per year can shave years off a mortgage and save significant interest over the life of a loan.