Extra principal payment
What is extra principal payment?
An extra principal payment is money paid above the required amount and applied directly to the balance. It shortens the loan and cuts total interest, but does not lower the required monthly payment.
What it means in practice
Every extra dollar of principal eliminates all future interest that dollar would have accrued, which is why extra payments are most powerful in the early years.
Confirm with your servicer that extra amounts are applied to principal rather than held as a prepaid future payment.
If lowering the required payment is the goal, a recast rather than extra payments is the mechanism — the two are frequently confused.