Loan Calculator withExtra Payments
Use extra payments to pay off your loan faster and save significantly on interest. Our guide shows you how it works.
Interest savings possible
Penalty by law
Repayment possible
BGB right guaranteed
Key Takeaways
- 1Extra payments are additional payments on your loan that reduce your remaining balance and thus your interest costs.
- 2Under Section 489 BGB, you have the right to repay at any time - the bank may charge a maximum of 1% penalty.
- 3The earlier you make extra payments, the greater your interest savings.
- 4Many loans offer free extra payment options - look for this when comparing!
1. What Is an Extra Payment?
An extra payment (Sondertilgung in German) is an additional payment on your loan beyond the agreed monthly installment. This extra payment is directly deducted from the remaining debt, reducing the interest you pay in the future.
How Extra Payments Work
Make Extra Payment
You pay an amount beyond the regular installment
Balance Decreases
The amount is directly deducted from your debt
Interest Savings
Lower balance means less interest
Difference from Regular Installments
With regular installments, you pay a mix of interest and principal. With an extra payment, the entire amount goes toward principal - so you save disproportionately on interest.
2. Benefits of Extra Payments
Significant Interest Savings
Every euro of extra payment saves interest for the entire remaining term. The earlier, the more!
Shorter Term
Through extra payments, you can pay off your loan years earlier and become debt-free faster.
Risk-Free Return
An extra payment is like a guaranteed investment with your loan's interest rate - tax-free.
Flexibility
Use bonus payments, inheritances, or tax refunds wisely for debt reduction.
3. Calculation Examples: How Much You Can Save
The following examples show how much you can save through extra payments at different loan amounts. The higher the interest rate and the earlier the extra payment, the greater the effect.
Example 1: Installment Loan EUR 10,000
Without Extra Payment
- Loan Amount:EUR 10,000
- Interest Rate:6% eff. p.a.
- Term:48 months
- Monthly Payment:EUR 234.85
- Total Interest:EUR 1,272.80
With EUR 2,000 Extra Payment (after 12 mo.)
- Loan Amount:EUR 10,000
- Interest Rate:6% eff. p.a.
- New Term:38 months
- Monthly Payment:EUR 234.85
- Total Interest:EUR 892.40
Your Savings: EUR 380.40 + debt-free 10 months earlier
Example 2: Car Loan EUR 20,000
Without Extra Payment
- Loan Amount:EUR 20,000
- Interest Rate:5% eff. p.a.
- Term:60 months
- Monthly Payment:EUR 377.42
- Total Interest:EUR 2,645.20
With EUR 3,000 Extra Payment Annually
- Loan Amount:EUR 20,000
- Interest Rate:5% eff. p.a.
- New Term:36 months
- Monthly Payment:EUR 377.42
- Total Interest:EUR 1,287.60
Your Savings: EUR 1,357.60 + debt-free 24 months earlier
Example 3: Home Improvement Loan EUR 50,000
Without Extra Payment
- Loan Amount:EUR 50,000
- Interest Rate:6.5% eff. p.a.
- Term:84 months
- Monthly Payment:EUR 744.19
- Total Interest:EUR 12,511.96
With EUR 5,000 Extra Payment Annually
- Loan Amount:EUR 50,000
- Interest Rate:6.5% eff. p.a.
- New Term:54 months
- Monthly Payment:EUR 744.19
- Total Interest:EUR 7,186.26
Your Savings: EUR 5,325.70 + debt-free 30 months earlier
Note on Calculations
These examples are for illustration purposes. Your actual savings depend on the specific terms of your loan. Free extra payment options increase savings even more.
4. What to Watch Out for with Extra Payments
Prepayment Penalty
If your loan agreement does not provide for free extra payments, the bank may charge a penalty. This is legally limited to:
- Max. 1%for remaining term over 12 months
- Max. 0.5%for remaining term under 12 months
Minimum Amounts
Most banks require a minimum amount for extra payments, typically between EUR 500 and EUR 1,000. Smaller amounts are often not accepted. Check your loan agreement for exact conditions.
Deadlines and Cut-off Dates
With many loans, extra payments are only possible on specific dates, e.g., at year-end or on the anniversary of the contract. Plan your extra payment in advance.
Maximum Extra Payment
Some contracts limit annual extra payments to a certain percentage of the remaining balance (e.g., 5% or 10%). Check these limits to plan optimally.
5. When Is an Extra Payment Worthwhile?
Extra Payment Makes Sense
- +Loan interest higher than possible investment return
- +Financial reserve remains after extra payment
- +Free extra payment option in contract
- +Long remaining term - large interest savings
- +Desire to become debt-free faster
Better to Consider
- -Emergency fund would be depleted
- -High prepayment penalty required
- -Other more expensive debts exist (e.g., overdraft)
- -Short remaining term - small savings
- -Major purchases planned soon
Rule of Thumb: Extra Payment vs. Investing
If your loan interest rate is higher than the return you could achieve with the money (after taxes), an extra payment is almost always worthwhile. For a loan at 6% interest, you would need to earn about 8% pre-tax to do better - an unrealistic scenario for low-risk investments.
6. Your Legal Rights (Section 489 BGB)
Section 489 BGB - Right to Terminate
The German Civil Code guarantees you as a consumer the right to repay your loan in full or in part at any time. This right cannot be excluded by contract.
For Consumer Loans
Repayment possible anytime, bank may charge max. 1% penalty
For Mortgages
After 10 years, can be terminated anytime with 6 months notice (special termination right)
Your Rights at a Glance
| Right | Regulation | Legal Basis |
|---|---|---|
| Early Repayment | Possible anytime | Section 500 BGB |
| Max. Penalty | 1% (0.5% for remaining term under 12 mo.) | Section 502 BGB |
| Balance Information | Bank must inform within 7 days | Section 500 BGB |
| No Processing Fee | Additional fees not permitted | Federal Court Rulings |
7. Compare Loans with Extra Payment Options
Find a loan with flexible extra payment options. When comparing, look for free extra payment options - this can save you an extra EUR 200 per year on a EUR 20,000 loan.
Advertising - We receive a commission upon contract conclusion. This does not affect the neutrality of our comparison.
Extra Payment
Often free
Schufa-neutral
Rate inquiry
Flexible
Payment adjustment
Fast
24h disbursement
8. Frequently Asked Questions about Extra Payments
An extra payment (Sondertilgung) is an unscheduled repayment on your loan that goes beyond the regular monthly installment. This directly reduces your remaining debt, meaning you pay less interest and can pay off the loan sooner.
The savings depend on the loan amount, interest rate, and timing of the extra payment. For a EUR 20,000 loan at 6% interest, an annual extra payment of EUR 2,000 can save you approximately EUR 1,500-2,500 in interest and shorten the term by 1-2 years.
Most banks require a minimum amount of EUR 500-1,000 per extra payment. Some banks also allow smaller amounts. The exact conditions can be found in your loan agreement.
No, according to Section 489 of the German Civil Code (BGB), you as a consumer have the legal right to repay your loan in full or in part at any time. However, the bank may charge a prepayment penalty if the contract does not include a free extra payment option.
If your contract provides for free extra payments, no fees apply. Otherwise, the bank may charge a maximum prepayment penalty of 1% of the repaid amount (0.5% if the remaining term is less than 12 months).
The earlier you make extra payments, the greater your interest savings. The beginning of the loan term is ideal. With many contracts, extra payments can only be made on specific dates (e.g., at year-end).
Extra payments are almost always worthwhile if the loan interest rate is higher than the expected return on an investment. For a loan at 6% interest, an extra payment is essentially a risk-free, tax-free return of 6%.
Notify your bank in writing about the planned extra payment. Specify the amount and date. The bank will then provide you with the updated repayment schedule. Many banks also allow this via online banking.
Related Guides
Legal Notice
The information on this page is for general information purposes only and does not constitute financial advice. The calculation examples are simplified and for illustration. Your actual savings depend on the specific conditions of your loan agreement. For binding information, please consult a licensed financial advisor or the lending bank directly. Last updated: February 2026.