Lump Sum Calculator

Every loan agreement, whether for a mortgage, student loan or auto loan, requires minimum monthly payments to be paid on the loan. A portion of this monthly payment goes toward the interest accrued on the debt, with the remainder of the payment being applied toward the principal, which is the balance owed on the loan. The process of reducing the principal balance of the loan is known as amortization.

The interest owed on the mortgage is determined by the interest rate assigned by the lender. Interest is assessed daily, based on the amount remaining on the loan (the principal). Because interest is assessed daily, the faster the loan is amortized, the less the borrower will pay on the loan.

The lump sum calculator on this page will help you determine how a lump sum repayment will affect the amount of interest paid and the amount of time you pay on the loan. To use the lump sum calendar, enter the loan amount, interest rate and loan term for your loan. Then select the repayment frequency. (Note: monthly payments are the full amount paid once per month, fortnightly payments are half the payment paid every two weeks and weekly payments are 25% of the payment paid each week). Enter the amount of the lump sum to be paid. Then select when the lump sum payment will be made.

The calculator will then show you the amount of your monthly repayment and the time and interest saved from the lump sum payment.

Note: The results from this calculator should be used as an indication only. Results do not represent either quotes or pre-qualifications for a loan. It is advised that you consult your financial adviser before taking out a loan.

Money-Saving Tips

  • Apply any unexpected income to your loan to save money in interest and reduce the number of payments you make over the life of the loan. Income tax returns, gifts or bonuses applied to the loan will save you money in interest. Remember: the sooner the lump sum is applied, the better.
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