Loan Payoff Reality Check Calculator
Loan payoff reality check
This calculator helps you test whether your planned monthly payment is realistic for a chosen target payoff date. It also estimates how much interest you may pay during the target timeframe and suggests a monthly payment that can meet the target.
What the results tell you
- Meets target date? checks whether your balance reaches \(0\) by the target date.
- Remaining balance at target shows how much would still be unpaid if the target is missed.
- Interest paid by target sums interest charges during the target timeframe.
- Suggested monthly payment is a practical estimate (rounded up to whole dollars) to meet the target.
Core math used
Monthly interest rate
The calculator converts APR to a monthly rate:
\( r = \frac{\text{APR}}{100 \cdot 12} \)
Monthly interest and balance update
For each month \(t\), interest is estimated from the starting balance \(B_t\):
\( I_t = B_t \cdot r \)
With an optional monthly fee \(F\) and payment \(P\), the next balance is:
\( B_{t+1} = B_t + I_t + F - P \)
Suggested payment to meet a target date
If you want to fully pay off a principal \(B\) in \(n\) months with monthly rate \(r\), the standard amortization payment is:
\[ P = \frac{r \cdot B}{1 - (1+r)^{-n}} \]
If \(r = 0\), a simple estimate is:
\( P = \frac{B}{n} \)
The calculator rounds the suggested payment up to whole dollars to improve the chance of meeting the target in real usage.
Negative amortization warning
If your monthly payment is less than interest (and fees) for a given month, the balance can grow. The schedule highlights these months because they indicate the plan is not sustainable without changes.