Loan Payment Calculator
Explore monthly payments and total interest from your assumptions.
Runs locally in your browser
Use one consistent currency. Excludes fees, insurance and taxes.
Discuss a result
Write a short summary and review it before posting. Your tool inputs are never copied automatically.
What is the Loan Payment Calculator?
A fixed-rate installment loan, such as many car loans, personal loans and mortgages, is repaid in equal monthly payments. Each payment first covers that month's interest, and the rest reduces the balance, so early payments are mostly interest and later payments are mostly principal. Knowing the payment and the total interest before signing makes it possible to compare offers with different rates and terms on the same basis.
This calculator takes three inputs: the loan amount, the annual interest rate as a percentage and the term in years, which may include fractions such as 2.5. It converts the term to whole months and the annual rate to a monthly rate by dividing by 12, then applies the standard amortization formula. It shows the monthly payment, total interest and total repaid, each rounded to two decimals. It does not produce a month-by-month schedule, and it assumes monthly compounding with no fees, insurance or extra payments. Use one currency throughout; the math is the same for any.
How to use it
- 1Enter the principal, annual interest rate and term.
- 2Review the monthly payment and total interest.
- 3Compare the estimate with actual loan terms.
How it works
Uses the standard fixed-rate amortization formula. At zero interest, the principal is divided evenly over the months.
Example
A $10,000 balance at 6% annual interest over 3 years has a monthly payment of about $304.22.
Limitations & notes
- Excludes fees, insurance, taxes, variable rates and lender-specific rounding.
- For planning only; compare any offer with its actual terms.
Frequently asked questions
How is a monthly loan payment calculated?
The standard formula is M = P x r / (1 - (1 + r)^-n), where P is the principal, r is the monthly rate (the annual rate divided by 12) and n is the number of monthly payments. For $10,000 at 6 percent over 3 years, r is 0.005 and n is 36, giving a payment of about $304.22. Multiplying by 36 and subtracting the principal gives about $951.90 in total interest.
Does a longer loan term cost more in total?
Usually yes. A longer term lowers the monthly payment but raises total interest, because the balance stays outstanding longer. At 6 percent, $10,000 over 3 years costs about $951.90 in interest, while the same loan over 5 years has a payment of about $193.33 and roughly $1,599.68 in interest. Comparing both the monthly figure and the total interest shows the full tradeoff between terms.
What is the difference between APR and the interest rate?
The interest rate determines the payment on the amount borrowed. APR, the annual percentage rate, also folds in certain upfront costs such as origination fees, so it is usually higher and is better for comparing offers with different fees. This calculator treats whatever rate you enter as a pure interest rate on the loan amount, so entering an APR gives an approximation of cost rather than the lender's exact payment.
How much of each payment goes to interest?
Each month's interest is the remaining balance times the monthly rate. In month one of a $10,000 loan at 6 percent, that is $10,000 x 0.005 = $50, so $254.22 of the $304.22 payment reduces the balance. The next month, interest is charged on $9,745.78, about $48.73, and the principal share grows. By the final payment, interest is about $1.51. This calculator shows totals only, not a month-by-month schedule.
Why might a lender's payment differ from this result?
Lenders may round each payment and adjust the final one, accrue interest daily rather than monthly, include escrow for property taxes and insurance in a mortgage payment, or add fees and optional insurance. Variable-rate loans also change payment when the rate resets. This calculator assumes a fixed rate compounded monthly, equal payments and a term rounded to whole months, so treat its result as a baseline to compare against the lender's disclosure.
No directly related discussion yet.
Start a focused thread and share the question this tool helped you explore.
Ask the community about Loan Payment Calculator