For example, if the principal portion of payment #2 ($252.26) is paid along with payment #1 then the interest savings of $1,148.57 is saved and the regular payment #2 disappears and the amortization period is reduced by one payment. In fact if you cut out payment #2 from the schedule after the prepayment and tape it back together the schedule is mathematically correct except for the payment dates and the payment numbers. In this example, a prepayment of $252.26 saves you $1,148.57 of interest (subtract the two SPREADSHEET Totals to verify) . Think of it this way, you must pay back all the principal however by choosing to prepay principal before it is due you save on the interest. So do it in accordance with your amortization schedule and know your savings without the need of a computer or software. How refreshing is that for free advice?

This technique can be applied at any time in the schedule and for any number of payments as long as the prepayment amount coincides with the schedule. So if all the principal payments from 13 to 24 were added up and prepaid along with payment 12 the savings in interest would be the sum of the interest portions of payments 13 to 24.