Is it worth paying off my personal loan early?

Usually yes! Personal loans have relatively high interest rates (7-15%), so paying them off early saves significant interest. The only exceptions are if early exit fees are very high, or if you could earn higher returns investing that money elsewhere.

Do all personal loans have early exit fees?

No, many modern personal loans don't have early exit fees, especially variable rate loans. Fixed rate loans are more likely to have break costs. Always check your loan contract before making extra payments.

Should I pay off my personal loan or save?

Generally, paying off debt is better than saving if your loan interest rate is higher than what you'd earn on savings. With personal loan rates at 10%+ and savings rates around 4-5%, paying off the loan usually wins.

Early Payout Calculator

Calculator

Calculate how much you'll save by paying off your personal loan early

Free to useNo data storedAI insightsUpdated: February 2026

Paying off your personal loan early can save you hundreds or even thousands in interest. Our calculator shows you exactly how much you'll save and how much faster you can be debt-free.

Enter Your Details

Real-World Examples

Extra $100/month on Car Loan

Alex has $18,000 at 10% with 4 years remaining. Adding $100/month extra.

Inputs Used:

loanAmount:18,000interestRate:10loanTerm:4extraRepayment:100extraFrequency:Monthly

Loan paid off 13 months early. Interest saved: $1,247. Total savings nearly covers a year of the extra payments.

Lump Sum vs Monthly Extra

Sam receives a $2,400 bonus. $12,000 loan at 12%, 3 years remaining.

Inputs Used:

loanAmount:12,000interestRate:12loanTerm:3extraRepayment:2,400extraFrequency:One-off

Lump sum now saves $864 in interest. If instead spread as $200/month extra over 12 months, saves $642. Immediate lump sum beats gradual payments.

Frequently Asked Questions

Glossary

Early Exit Fee

A fee charged by some lenders when you pay off a loan before the agreed term ends. More common on fixed rate loans.

Principal

The original amount borrowed, excluding interest. Extra payments go directly to reducing the principal.

Amortization

How loan payments are split between interest and principal over time. Early payments are mostly interest; extra payments reduce principal faster.

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How to Use

1Enter your current loan balance
2Input your interest rate
3Enter the remaining years on your loan
4Add the extra amount you want to pay
5Select how often you'll make extra payments
6See your savings and new payoff date

Key Information

Even $50 extra per month can save hundreds in interest
Variable rate loans usually have no extra repayment limits
Fixed rate loans often have caps on extra repayments
Making fortnightly payments instead of monthly saves interest too

Pro Tips

Round up your payments - if minimum is $347, pay $400. You won't notice the difference but it adds up
Put tax refunds and bonuses straight onto the loan - before you spend them
Switch to fortnightly payments - same money, but you make an extra month's payment per year
Check if there's an early exit fee - sometimes it's worth paying to escape high rates

Avoid These Mistakes

Not checking for early exit fees first - some fixed loans have significant penalties
Saving extra money instead of using it on debt - at 10% loan vs 4% savings, the math is clear
Stopping extra payments when life gets busy - set up an automatic transfer
Not recalculating after a rate change - lower rates mean more goes to principal with each payment

Disclaimer: This calculator provides estimates only and should not be relied upon for financial decisions. Interest rates, fees, and policies change frequently. Always verify information with lenders directly. This is general information, not personal financial advice. Consider seeking advice from a licensed mortgage broker or financial advisor.

Last updated: February 2026