Business Loan Amortization Calculator with Extra Payments
This calculator helps business borrowers understand how extra recurring payments or a single lump-sum principal paydown change the amortization schedule: it shows revised payoff period, total interest paid, and estimated interest savings compared with the original schedule.
Use the three modes for common scenarios: standard amortization (no extras), recurring extra payment applied to each scheduled payment, or a one-time lump-sum reduction applied at a chosen payment. Review the accuracy caveats below before relying on precise cent-level amounts.
Apply a fixed extra amount to each scheduled payment (optionally beginning after a chosen payment). Computes shortened payoff and interest savings.
Inputs
Advanced inputs
Recurring extra payment options
Lump-sum options
Results
Payment with recurring extra
$2,938.70
Number of payments to payoff
—
Years to payoff
—
Interest saved
—
| Output | Value | Unit |
|---|---|---|
| Payment with recurring extra | $2,938.70 | — |
| Number of payments to payoff | — | payments |
| Years to payoff | — | years |
| Interest saved | — | currency |
Visualization
Methodology
All methods assume a fixed nominal annual interest rate, constant payment amount for the scheduled payment, and that extra payments are applied directly to principal at the time of each payment.
Calculations use standard annuity formulas: the periodic rate is the annual rate divided by payments per year; the scheduled payment solves the annuity present value equation. For recurring extras and lump sums the remaining number of payments is solved from the annuity equation algebraically.
This tool does not model variable rates, grace periods, fees, escrow, prepayment penalties, compounding conventions other than per-period, or lender-specific allocation rules. For those cases, request an official amortization schedule from your lender.
Worked examples
Example: $200,000 loan, 6% annual, 10-year term, monthly payments. Adding $200 extra per month shows faster payoff and interest saved compared to the original schedule.
Example: Same loan, $10,000 lump sum after 12 payments reduces principal and shortens remaining term; results assume scheduled payments stay constant after the lump sum.
Further resources
Expert Q&A
Does the calculator account for prepayment penalties or fees?
No. The model does not include prepayment penalties, origination fees, or other lender-specific charges. If your loan has such terms, obtain a lender-provided schedule or adjust results manually to include those costs.
What if the interest rate is zero?
At a zero interest rate the scheduled payment formula simplifies to principal divided by number of payments. Some algebraic expressions in this tool assume a positive rate; results for a zero rate are handled conceptually but verify output in that edge case.
Are results exact to the cent?
Results are algorithmic estimates using closed-form annuity equations and algebraic solutions for remaining periods. Small rounding rules, day-count conventions, or lender allocation rules can shift cents and payment counts; treat outputs as accurate estimates, not legal or loan-accounting statements.
Can I enter weekly or custom payment frequencies?
You may select common frequencies (monthly, quarterly, annual). For other frequencies, convert payments_per_year accordingly (for example, 52 for weekly) but verify with your lender how interest is compounded and payments are applied.
Sources & citations
- NIST — Recommended Security and Privacy Practices (general reference for trustworthy software) — https://www.nist.gov/
- ISO — Standards organization (general reference for quality management and measurement traceability) — https://www.iso.org/
- IEEE — Engineering standards and best practices (general reference) — https://www.ieee.org/
- OSHA — Workplace safety standards (referenced for operational compliance in business contexts) — https://www.osha.gov/