Loan Calculator | Loan Payment Calculator

1. Enter the loan amount (the principal you want to borrow).
2. Enter the annual interest rate as a percentage.
3. Enter the term in years.
4. Read your monthly payment, along with the total interest and total cost over the loan.

Here is what each result means:

A loan calculator turns three simple inputs, the amount borrowed, the interest rate and the term, into the fixed monthly payment and the total cost of a loan. It uses the standard amortization formula that lenders use, so the payment covers both interest and principal and clears the balance exactly at the end of the term.

It helps you compare offers, test how a different rate or term changes the payment, and check that a loan fits your budget before you apply. It estimates a fixed-rate, equal-payment loan and does not include lender fees, insurance or variable-rate changes.

It uses the amortization formula, which spreads the loan into equal monthly payments where early payments are mostly interest and later ones mostly principal.

1. Convert the annual rate to a monthly rate: r = annual rate / 100 / 12.
2. Convert the term to months: n = years x 12.
3. Apply the formula to get the monthly payment, then multiply by n for total cost and subtract the principal for total interest.

If the rate is zero, the payment is simply the amount divided by the number of months.

Suppose you borrow 25,000 at an annual rate of 7% over 5 years.

Calculation: monthly rate = 7 / 100 / 12 = 0.00583, n = 60 months. The formula gives a payment of about 495 a month.

Total cost = 495 x 60 = about 29,700, so total interest is roughly 4,700. Stretching the same loan to 7 years lowers the monthly payment but raises the total interest, because you pay interest for longer.

Three levers move your monthly payment and total cost.

Interest Rate

A higher rate raises both the payment and the total interest. Even a one-point difference adds up over a long term, so it pays to shop around.

Term Length

A longer term lowers the monthly payment but increases total interest, because you borrow for longer. A shorter term does the opposite.

Loan Amount

Borrowing less, or making a larger down payment, cuts both the payment and the interest. Rounding your amount up "just in case" is costly.

The term is the biggest trade-off between an affordable payment and a low total cost.

Pick the shortest term whose payment still fits your budget comfortably. Check the monthly figure against your other outgoings with the cash flow calculator.

Before You Apply

Test the payment and total cost for a few rates and terms so you know what is affordable and can spot an expensive offer.

Comparing Offers

Two loans with the same rate can cost very different amounts if the terms differ. Compare total cost, not just the monthly payment.

Budgeting a Big Purchase

For a car or home, see how the down payment and term change the monthly figure before you commit. Compare rate quotes with the APR vs APY calculator.

1. Confusing Rate with APR

APR includes some fees, so a loan can cost more than the headline rate suggests. Use APR to compare offers fairly.

2. Focusing Only on the Monthly Payment

A low payment often hides a long term and high total interest. Always check the total cost.

3. Ignoring Fees and Insurance

Origination fees, insurance and add-ons are not in the basic payment and can be significant.

4. Using an Annual Rate as a Monthly Rate

You must divide the annual rate by 12. This calculator does it for you.

5. Forgetting Extra Payments

Paying more than the minimum shortens the term and cuts interest, which a basic estimate does not show.

The math is exact for a standard fixed-rate, fully amortizing loan, but real loans can include costs this estimate leaves out.

It uses the amortization formula M = P x r(1+r)^n / ((1+r)^n - 1), where P is the principal, r is the monthly interest rate and n is the number of monthly payments. The payment stays fixed and clears the balance by the end of the term.

The interest rate is the cost of borrowing the principal, while APR also includes certain fees, so it reflects the fuller cost. Comparing loans by APR is fairer than comparing headline rates alone.

Yes, a longer term lowers the monthly payment because the balance is spread over more months. However, you pay interest for longer, so the total interest and total cost rise.

A great deal, especially on long loans. A higher rate raises both the monthly payment and the total interest, so even a one-point difference can add thousands over the life of the loan.

No. It estimates the payment on the principal at the rate and term you enter. Origination fees, insurance and other charges are not included, so your real cost may be higher.

The payment becomes the loan amount divided by the number of months, since there is no interest to add. This is useful for interest-free promotional offers.

Yes. The amortization math is the same for car loans, personal loans and mortgages. For a mortgage, remember to add property tax and insurance separately, as those are not part of the base payment.

Choose a shorter term, secure a lower rate, borrow less, or make extra payments toward the principal. Each reduces the total interest, though a shorter term raises the monthly payment.

No. The calculation runs entirely in your browser and nothing you enter is stored or sent anywhere unless you choose to Save a result, which stays only in this browser.

• Amortization explained (Corporate Finance Institute).
• Understanding loan APR (US SEC Investor.gov).
• How an amortization schedule works (Corporate Finance Institute).