The flip side to calculators like the home loan repayment calculator or the split loan calculator, which provide home buyers with the monthly, fort nightly or weekly repayments they can expect, is the lump sum repayment calculator. The lump sum repayment calculator gives borrowers an idea of exactly how much they will save if they pay off the entire loan right now. Because of compounding interest, the longer a loan lasts, the more expensive it is for borrowers. Some borrowers may find themselves considering finding a way to pay off the entire loan, and this calculator will let these borrowers know what they are saving by eliminating all that interest.

 

In order to use the lump sum repayment calculator, borrowers must provide all the details of the original loan. This includes the initial total loan amount, the interest rate, and the loan term. In addition to this, borrowers also need to list information on the introductory rate if there was one, and what the rate was. After this, the borrower will also need to detail how much of the loan has been paid so far. Once the calculator has this information, it will determine the cost savings, based on the original and existing amounts, interest, and time left on the loan, if the borrower were to pay off the entire loan right away.

 

Paying off a loan early and avoiding years and years of interest can save tens of thousands of dollars for home buyers who have the funds to do so. Even if you’re just looking at it in theory and have no current plans right now to pay off a loan, using the lump sum repayment calculator is a helpful exercise to see the impact of interest and to get an idea of how home loans really work.

Important: This calculator is provided to be use as a guide only and should not be considered a quote, a loan offer, or investment advice. Other criteria may need to be considered, and before taking out a loan you should always consult with your personal financial adviser.