Loan Calculator

Calculate payments, total interest and payoff time for any amortizing loan.

About Loan Calculator

This uses the standard amortization formula to spread principal and interest evenly across every payment so the loan reaches a zero balance at the end of the term.

Formula

M = P · r / (1 − (1+r)^−n)

M: Monthly payment
P: Loan principal
r: Monthly interest rate = Annual rate ÷ 12
n: Loan term in months

Worked example

With the default values below, Loan Calculator returns Monthly Payment of $400.76. Change any input above and every figure here is recalculated in your browser.

Inputs used

Loan Amountaccepts 100–1,000,000 $: 20,000 $
Annual Interest Rateaccepts 0–40 %: 7.5 %
Termaccepts 1–480 months: 60 months

Results

Monthly Payment: $400.76
Total Interest: $4,045.54
Total of Payments: $24,045.54

Step by step

1Monthly interest rate: Annual rate ÷ 12= 0.6250%
2Monthly payment: M = P · r / (1 − (1+r)⁻ⁿ)= $400.76
3Total of all payments= $24,045.54
4Total interest: Total Paid − Principal= $4,045.54

Assumptions and limits

The result is derived only from the 3 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation, tax or fees or charges into account.
Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
Estimates for informational purposes only and not financial advice. Actual loan terms may vary by lender.
This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

What determines a loan payment

Four inputs, and only four: the amount borrowed, the interest rate, the term, and the payment frequency. Everything a lender adds beyond that — fees, insurance, add-ons — sits on top rather than changing the underlying arithmetic.

The payment is set so the loan reaches exactly zero at the end of the term. Early payments are mostly interest; later ones are mostly principal. That shift is the defining behaviour of an amortising loan.

APR is the number to compare, not the rate

The interest rate covers interest only. APR folds in mandatory fees and gives a figure you can compare across lenders. A 5.9% rate with a large arrangement fee can easily cost more than a 6.3% rate with none.

Two APRs are only comparable when the terms match. A 3-year loan at 7% and a 5-year loan at 7% have the same rate and very different total costs — the longer loan costs substantially more interest for a lower monthly payment.

The trade-off nobody states plainly

Extending a term always reduces the monthly payment and always increases total interest. Both halves of that sentence are true simultaneously, and lenders advertise the first half.

If a longer term is the only way to make a payment affordable, that is useful information about the size of the purchase, not just about the loan.

Overpaying

Any payment above the scheduled amount comes off the principal directly, and therefore removes all future interest that principal would have generated. Two things to check first:

Early repayment charges. Some fixed-rate agreements penalise overpayment.
How the lender applies it. Ask for it to reduce the *balance*, not to be

held as a credit against future payments — the two have very different effects.

Secured versus unsecured

Secured loans are backed by an asset and carry lower rates because the lender's risk is lower. The asset can be taken if you default. Unsecured loans cost more and put no specific asset at risk, though default still has serious consequences.

Before signing

Total repayable, not just the monthly figure
APR rather than the headline rate
Whether the rate is fixed or variable
Early repayment terms
What happens if a payment is missed

For mortgages specifically, use the mortgage calculator, which handles tax, insurance and PMI as separate components.

Guides that use this calculator

Estimates for informational purposes only and not financial advice. Actual loan terms may vary by lender.

Frequently Asked Questions

Is this the same as APR?

This uses your nominal annual interest rate. APR also includes certain fees, so your real cost of borrowing may be slightly higher than shown here.

Can I use this for any loan type?

Yes — any fixed-rate, fully-amortizing loan such as personal loans, student loans, or business loans works with this calculator.

Why is the term entered in months rather than years?

Because general-purpose loans are rarely sold in whole years. Personal loans come in 36, 48 or 60 months, student loans in 120, and dealer financing in 72 or 84. Entering months directly avoids rounding a 54-month offer to 4.5 years. For a loan quoted in years, multiply by 12 — a 5-year loan is the default 60 months.

What does moving the default loan from 60 months to 36 do to the cost?

On $20,000 at 7.5%, the payment climbs from $400.76 to $622.12, while total interest drops from $4,045.54 to $2,396.48. You pay $221 more a month and keep about $1,649. Going the other way to 84 months gives a $306.77 payment but $5,768.30 of interest — the cheapest-looking payment is the most expensive loan.

What is my balance halfway through the default 60-month term?

After 30 of 60 payments on $20,000 at 7.5%, you still owe $10,931.87 — more than half, despite having made half the payments. Interest is front-loaded because it is charged on the outstanding balance. If you are planning to sell financed collateral or refinance at the midpoint, use that figure rather than half the original amount.

Can I enter a rate of 0 for an interest-free loan?

A 0% loan is simply the amount divided by the number of months — $20,000 over 60 months is $333.33, with no interest at all. The amortization formula itself divides by the monthly rate, so it cannot handle zero directly. For promotional 0% offers, do that division by hand and compare it against any cash rebate you would be giving up.