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.
Example
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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