Loan Calculator
Monthly payment, total interest, and payoff.
Use this calculator when you need to understand the true cost of borrowing — not just the monthly payment. Enter the loan amount, annual interest rate, and repayment term to see your monthly payment, total interest paid, and total repayment amount. This is most useful when comparing loan offers with different terms: deciding whether a 3-year or 5-year term is better on the same principal, or checking whether a loan is affordable before accepting an offer. The calculation uses standard amortization, where each monthly payment covers accrued interest first and then reduces the principal. Early in the loan most of each payment is interest; this balance shifts gradually over time. An amortization schedule shows the full breakdown month by month. This calculator uses a fixed interest rate and does not include origination fees, insurance, or prepayment penalties — use the APR figure from your lender for the most accurate comparison between competing offers.
Loan Calculator
Formula
Examples
$10,000 Personal Loan at 8% for 3 Years
Typical personal loan for home improvement or an emergency expense.
→ Monthly: $313.36 | Total interest: $1,281 | Total paid: $11,281
$25,000 Car Loan at 6% for 5 Years
Standard auto loan for a mid-range vehicle.
→ Monthly: $483.32 | Total interest: $3,999 | Total paid: $28,999
$50,000 Student Loan at 5.5% for 10 Years
Standard 10-year student loan repayment.
→ Monthly: $542.36 | Total interest: $15,083 | Total paid: $65,083
Comparing 3-Year vs 5-Year — $20,000 at 7%
Shows how term length affects monthly payment versus total interest cost.
→ 3-year: $618/mo, $2,244 interest | 5-year: $396/mo, $3,760 interest — saving $222/month costs $1,516 more overall
$5,000 Short-Term Loan at 15% for 2 Years
Illustrates the relatively high cost of short-term high-rate borrowing.
→ Monthly: $242.43 | Total interest: $818 | Total paid: $5,818
Tips
- ✓Always compare APR — not just the stated interest rate — when evaluating competing loan offers. Fees make a meaningful difference.
- ✓Calculate total repayment cost before accepting a loan, not just the monthly payment. The monthly figure alone can be misleading.
- ✓Adding even a small amount to each monthly payment can save significant interest. Run the numbers before deciding it's not worth it.
- ✓A lower interest rate almost always matters more than the loan term — reducing the rate by 1% on a $30,000 loan saves over $800 in interest.
- ✓If your lender charges a prepayment penalty, factor that into any plan to pay off early.
Frequently Asked Questions
How is the monthly loan payment calculated?
Monthly Payment = P × [r(1+r)ⁿ] ÷ [(1+r)ⁿ − 1], where P = principal, r = monthly interest rate (annual rate ÷ 12), n = total number of monthly payments. For example, a $10,000 loan at 8% for 3 years: r = 0.00667, n = 36, monthly payment = $313.36.
What is amortization?
Amortization is the process of paying off a loan through scheduled equal payments. Each payment is split into an interest portion (charged on the remaining balance) and a principal portion (which reduces the outstanding balance). Early payments are mostly interest; later payments shift toward principal.
Does a longer loan term always mean lower payments?
Yes — but at a cost. A $20,000 loan at 7%: a 3-year term gives $618/month and $2,244 total interest. A 5-year term gives $396/month but $3,760 total interest. The extra 2 years saves $222/month but costs $1,516 more overall.
What is APR vs interest rate?
The interest rate is the annual cost of borrowing the principal. APR (Annual Percentage Rate) includes the interest rate plus lender fees and other charges, expressed as a yearly rate. APR is the more meaningful comparison figure when evaluating competing loan offers — two loans with the same interest rate but different fees will have different APRs.
How much can I save by making extra payments?
Extra principal payments reduce your outstanding balance, which reduces future interest charges. On a $20,000 5-year loan at 7%, adding just $50 extra per month saves approximately $430 in total interest and pays off the loan about 7 months early.
Does this calculator include fees and insurance?
No. This calculator covers principal and interest only. Real loan costs may include origination fees, processing charges, payment protection insurance, and prepayment penalties. Use the lender's quoted APR — which includes fees — to make accurate comparisons.
What is the difference between a fixed and variable rate loan?
A fixed-rate loan maintains the same interest rate for the entire term — monthly payments are fully predictable. A variable-rate loan has a rate that can change based on a benchmark rate (e.g., prime rate), meaning your monthly payment can increase or decrease over time. This calculator is designed for fixed-rate loans.
What should I do if I cannot make a payment?
Contact your lender early — before missing a payment. Many lenders offer temporary deferment, forbearance, or restructured payment plans for borrowers facing hardship. Proactive communication protects your credit score and avoids default penalties, which are far more costly than the original payment.
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Business & PricingDisclaimer: This calculator provides estimates for educational purposes only. It uses a fixed interest rate and does not include origination fees, insurance, taxes, or prepayment penalties. Actual loan terms depend on creditworthiness, lender policies, and prevailing market rates. Always consult a licensed financial professional before making significant borrowing decisions.