1. What is a Lump Sum Payoff Calculator?

Definition: This calculator determines the remaining payoff amount after applying a lump sum payment to a balance that includes interest.

Purpose: It helps borrowers understand how much they'll still owe after making a large one-time payment toward their debt.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( Payoff \) — Remaining amount to be paid ($)
• \( Balance \) — Current principal balance ($)
• \( Interest \) — Accrued interest ($)
• \( Lump \) — Lump sum payment amount ($)

Explanation: The calculator adds the interest to the principal balance, then subtracts the lump sum payment to determine the remaining payoff amount.

3. Importance of Lump Sum Payoff Calculation

Details: Calculating the remaining payoff after a lump sum helps borrowers plan their finances, understand the impact of large payments, and potentially save on future interest.

4. Using the Calculator

Tips: Enter the current balance, accrued interest, and planned lump sum payment. All values must be ≥ 0. The result shows the remaining payoff amount.

5. Frequently Asked Questions (FAQ)

Q1: What if my lump sum is larger than my balance + interest?
A: The calculator will show $0 (you can't have a negative payoff amount).

Q2: Does this calculator account for early payment penalties?
A: No, check with your lender about any prepayment penalties that might apply.

Q3: Should I include regular payments in the lump sum amount?
A: No, this calculator is for one-time lump sum payments only.

Q4: How do I find my accrued interest?
A: Check your loan statement or contact your lender for the exact amount.

Q5: Can this be used for mortgages, car loans, etc.?
A: Yes, it works for any type of loan where you want to calculate the impact of a lump sum payment.