Effect of Lump-Sum Payment on Loan

You can use this calculator to determine the savings in both time and dollars when paying a lump sum to bring down a loan balance. This calculator does not take any prior payments or loan balance into account. It starts from the current loan balance and goes forward.

To open this calculator, click Calculators in the toolbar, and then click Other Loan > Effect of Lump-Sum Payment on Loan in the left panel.

You can export the data as a PDF file or clear all data that you entered. For more information, see Financial calculators.


What if your client has $100,000 remaining on his mortgage and he makes a $10,000 lump-sum payment?

Field Input
Loan balance $100,000
Lump-sum payment $10,000
Each payment $900
Payments per year 12
Annual interest rate 6%
Compounded Payment Date

In this example, the mortgage would be shorter by two years, and the client would save $11,254.40 in interest expense.

Note: The compounded daily calculation uses 365 days. The other option for compounding interest is each payment date. The difference between the interest rate and the effective interest rate is caused by the compounding of interest.

Internal notes


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