The "$100 Extra" Rule: How Tiny Payments Crush Interest

When you look at a $300,000 or $400,000 loan balance, an extra $100 bill feels like a drop in the ocean. It feels insignificant. You might think, "Why bother? It won't make a dent."

The truth is, because of how amortization works, small payments made early in the loan destroy massive amounts of future interest. By adding $100 to the principal, you prevent interest from generating on that $100 for the next 30 years.