Estimate an amortized loan early-settlement payoff from original terms or a current balance. Includes fee, accrued interest, remaining interest, and net savings.
Early Settlement (Remaining Principal) Formula
Terms mode estimates fixed monthly amortization, then adds the entered percentage fee to the outstanding principal immediately after the stated payment. Current-balance mode adds simple daily interest and the entered fee. USD is the convention; obtain a dated lender payoff statement for an actual settlement.
For original terms, calculate the monthly payment A and remaining principal B:
At zero interest, the remaining principal simplifies to:
For a current principal balance and settlement delay:
Add the entered lender fee to the principal and any accrued interest:
- B = modeled remaining principal; A = fixed monthly payment; i = annual interest percentage / 1200
- P = original principal loan amount
- N = total number of monthly payments in the repayment schedule
- M = number of monthly payments already made
Select original terms or current balance explicitly. Complete all main fields. Term, payment count and settlement days must be whole numbers; a blank optional fee means zero. Terms mode assumes no extra/missed payments and uses unrounded monthly calculations. A fee-inclusive APR is not interchangeable with the nominal interest input.
Remaining Principal by Loan Progress
This table is a zero-interest illustration only. At positive interest, fixed-payment amortization does not repay equal amounts of principal each month.
| Payments Completed | Principal Repaid | Remaining Principal |
|---|---|---|
| 0% | 0% | 100% |
| 25% | 25% | 75% |
| 50% | 50% | 50% |
| 75% | 75% | 25% |
| 100% | 100% | 0% |
Common Monthly Loan Terms
| Loan Term | Total Monthly Payments | Halfway Point |
|---|---|---|
| 1 year | 12 | 6 payments |
| 2 years | 24 | 12 payments |
| 3 years | 36 | 18 payments |
| 5 years | 60 | 30 payments |
| 7 years | 84 | 42 payments |
Example Problems
Example 1: Calculate the early settlement amount
For a zero-interest, zero-fee example, you borrowed $12,000 over 48 monthly payments and have made 18 payments.
The estimated remaining principal is $7,500.00.
Example 2: Estimate payoff from a current balance
A dated current principal balance is $14,000. Assume a 6% nominal annual rate, 10 settlement days on a 365-day basis and a 1% balance-based fee.
The modeled payoff is $14,163.01. Compare it with the lender’s dated statement and contractual rounding rules.
FAQ
Is the early settlement amount the same as a loan payoff amount?
A principal balance and payoff quote can differ. This model includes the entered percentage fee and, in current-balance mode, simple daily interest. A real quote may also include other charges, rebates, insurance adjustments or lender-specific items.
How does the calculator model interest?
Original-terms mode uses fixed-payment monthly amortization; current-balance mode uses simple daily interest divided by 365. Neither models every contract, fee cap, statutory rebate, missed payment or lender rounding convention.
Can payments made be greater than total payments?
No. Under this model, payments made cannot exceed the total number of scheduled monthly payments. If payments made equals total payments, the modeled principal and balance-based fee are zero; other contractual charges are outside this model.
