Loan Calculator
Use this loan calculator to see what a fixed-rate loan really costs. Enter the amount you want to borrow, the interest rate and the term, and you get the monthly payment, the total interest over the life of the loan and a year-by-year schedule that shows how each payment splits between principal and interest. It works for personal loans, auto loans, student loans and mortgages.
Updated
Results
- Last paymentEqual principal method only
- Total interest
- Total of paymentsPrincipal plus interest
- Number of payments (months)
- Monthly interest rate
- Effective annual rateMonthly compounding, no fees; not the APR
| Year | Principal paid | Interest paid | Remaining balance |
|---|
Results are estimates. See the methodology below.
How to use the calculator
- Loan amount: the principal you borrow, without fees.
- Interest rate: the rate in your loan offer. US lenders quote an annual rate, so leave the switch on per year. Choose per month only if a lender gives you a monthly rate.
- Loan term: in years or months. A 5-year loan is 60 monthly payments.
- Advanced options: the repayment method. Fixed payment is the standard amortizing loan used by almost every US lender. Equal principal pays the same amount of principal each month, so the payment starts higher and falls over time; the result then shows both the first and the last payment.
The table and chart summarize each year: principal repaid, interest paid and the balance left at year end.
How the payment is calculated
The annual rate is divided by 12 to get the monthly rate i, as US loan contracts do. A 7.5% loan charges 0.625% per month on the outstanding balance. For a loan amount P repaid in n months, the fixed payment is:
payment = P × i ÷ (1 − (1 + i)^−n)
Each month, interest is the balance times i; the rest of the payment reduces the balance. Early payments are mostly interest, later ones mostly principal. With equal principal, each payment is P ÷ n plus that month's interest.
The effective annual rate shows what the monthly rate adds up to over 12 months with compounding: (1 + i)^12 − 1. It includes no fees. It is not the APR from your loan disclosure, which also counts origination fees and other finance charges. To find the APR of an offer with fees, use our APR calculator.
Results are not rounded to the cent each month, so a lender's schedule can differ by a few cents, usually on the final payment.
Worked examples
1. $20,000 at 7.5% for 5 years
The monthly payment is $400.76. Over 60 payments you pay $24,045.54, of which $4,045.54 is interest. In year 1, $1,383.85 of your payments goes to interest and $3,425.26 to principal, leaving a balance of $16,574.74. By year 5, interest is down to $189.80.
2. Same loan, different terms
| Term | Monthly payment | Total interest |
|---|---|---|
| 3 years | $622.12 | $2,396.48 |
| 5 years | $400.76 | $4,045.54 |
| 7 years | $306.77 | $5,768.30 |
Stretching the loan from 5 to 7 years lowers the payment by about $94 but adds $1,722.76 in interest.
3. Fixed payment vs. equal principal
With equal principal, the same $20,000 at 7.5% over 5 years starts at $458.33 and ends at $335.42. Total interest is $3,812.50, $233.04 less than with fixed payments, because the balance falls faster.
How to read your results
The monthly payment tells you whether the loan fits your budget; the total interest tells you what borrowing costs. A lower payment almost always means a longer term and more interest. The rate matters as much as the term: the loan in example 1 at 11.5% instead of 7.5% costs $439.85 a month and $6,391.13 in interest, $2,345.59 more. When you compare offers, compare the APR in the disclosures, not only the interest rate.
Frequently asked questions
What is the difference between the interest rate and the APR?
The interest rate is the cost of borrowing the principal. The APR adds certain lender charges, such as origination fees, and expresses everything as a yearly rate. The Truth in Lending Act requires lenders to disclose the APR before you sign, so it is the better number for comparing offers: compare APR to APR.
How do I lower my monthly payment?
Borrow less, find a lower rate or choose a longer term. A longer term is the easiest lever but the most expensive one, as the term comparison above shows. Making a larger down payment or shopping several lenders reduces both the payment and the total interest.
Does the calculator include fees, taxes or insurance?
No. It calculates principal and interest only. Origination fees, mortgage insurance, property taxes, homeowners insurance and add-on products are extra. If a fee is rolled into the loan, add it to the loan amount to see its effect on the payment.
Why is most of my early payment interest?
Interest is charged on the outstanding balance, which is highest at the start. As the balance shrinks, less of each fixed payment goes to interest and more to principal. That is why extra payments early in the loan save the most interest.
Can I use it for a mortgage?
Yes, for the principal and interest part of a fixed-rate mortgage: enter the loan amount, the rate and 30 or 15 years. Your actual monthly housing payment is usually higher because escrow for property taxes and insurance is added.
Does it work for 0% financing?
Yes. At 0%, the payment is simply the amount divided by the number of months, and total interest is zero. Check the disclosure for fees and for what happens if a promotional rate ends.
Sources
Estimates for planning only, based on a fixed rate and on-time payments. Your lender's disclosures and amortization schedule are what count.