Why paying early saves money
Interest on an installment loan is calculated on the remaining balance. Any extra payment reduces that balance sooner, so every following month accrues less interest. Because Loanify loans have no prepayment penalty, the full benefit is yours.
How much you can save
Example: a $3,000 Loanify loan at 24.99% APR over 24 months has a payment of $160.10 and total interest of $842.39.
| Strategy | Paid off in | Total interest | You save |
|---|---|---|---|
| Regular payments | 24 months | $842.39 | – |
| Extra $50/month | 18 months | $597.61 | $244.78 |
| Extra $100/month | 14 months | $467.08 | $375.31 |
| Pay off the balance at month 12 | 12 months | $605.76 | $236.63 |
Try your own numbers with the Loanify loan calculator.
Five strategies that work
- Round up. Turn $160.10 into $175 or $200. Small, automatic and easy to forget about.
- Use windfalls. Put part of a tax refund, bonus or returned security deposit toward the balance.
- Redirect a finished bill. When another debt is paid off, add its payment to your Loanify loan.
- Make one extra payment a year. It can take months off a longer loan.
- Request a payoff quote before a lump-sum payoff so you pay the exact amount including accrued interest.
Tell us when you make an extra payment that you want applied to principal. It's the default for most loans, but confirming it is a good habit with any lender.Lending tip from the Loanify Editorial Team
When paying early isn't the best move
If you have no emergency savings, build a small cushion first. If you have other debt at a higher APR, such as a credit card at 28%, pay that down first. Paying early is great, but not at the expense of missing another bill.
Frequently asked questions
Does Loanify charge a fee to pay off my loan early?
No. Loanify loans have no prepayment penalty.
How do I get my Loanify payoff amount?
Contact support for a payoff quote, which includes interest accrued up to the payoff date.
More guides
What to do if you can't make a loan payment
Loan autopay: pros, cons and safe setup
Loanify loan requirements: what lenders check and why
About the Loanify Editorial Team
Our guides are researched, written and fact-checked against federal lending rules, CFPB guidance and current loan terms. Every payment example is calculated with the standard amortization formula. Read our editorial policy.