Understanding these payoff planning terms keeps your goal realistic.
Target payoff date
The month you want the loan to close. For instance, choosing Month 108 helps align the plan with a child’s graduation. It gives you a concrete deadline to work towards.
Required surplus EMI
The additional monthly amount needed to meet the goal. The calculator computes this automatically when you set a target. It is the "price" of your early freedom.
Goal shortfall
The difference between your current surplus and the amount required. A positive shortfall signals the need for higher payments or bigger lump sums. It is a warning light for your plan.
Milestone tracker
The month-by-month progress indicator that shows if you are ahead or behind schedule. It motivates course corrections early, preventing last-minute panic.
Acceleration factor
The ratio of original tenure to new tenure. Higher acceleration indicates faster debt freedom. A factor of 2x means you are paying off the loan in half the time.
Net benefit
Interest saved after penalties and opportunity cost adjustments. Use this to compare payoff goals with investment returns. It tells you the true value of your strategy.
Sinking fund
A dedicated savings bucket for future lump sums. Building it ensures planned deposits arrive on time. It prevents you from scrambling for cash when a lump sum date arrives.
Stress buffer
The cash cushion maintained even while pursuing an aggressive target. Protecting the buffer prevents derailment during emergencies. Never drain your emergency fund to pay off debt.
Rate sensitivity
The impact of future rate hikes or cuts on your goal timeline. Re-running the plan after rate changes keeps expectations realistic. Floating rates can move the goalposts.
Accountability log
The record of payments you have made versus the plan. Sharing it with a partner or advisor improves follow-through. Public commitment often leads to better results.