Extra payments go straight toward your loan's principal, which reduces the balance interest is calculated on for every payment afterward — a small monthly habit that can save years and thousands of dollars.
Why extra payments have outsized impact early on
Interest is calculated on your remaining balance every month. Paying down principal faster, especially early in the loan, means less balance to charge interest on for the rest of the term — the effect compounds in your favor.
Is it always the right move?
Extra payments are a guaranteed, risk-free 'return' equal to your loan's interest rate. If you could otherwise invest that money at a meaningfully higher expected return, investing might make more sense — it depends on your rate, risk tolerance, and other goals.