Loan Calculator
Find your monthly payment, total interest, and how extra payments can shorten your loan term — based on loan amount, interest rate, and term.
Your loan payment will appear here
Enter your loan amount, interest rate, and term, then click calculate to see your monthly payment.
Quick Answer
A loan calculator finds your monthly payment using the loan amount, interest rate, and term, based on an amortization formula that spreads principal and interest across each payment.
How It Works: Formula & Variables
M = P × [r(1+r)^n] / [(1+r)^n − 1]
- P
- Principal — the loan amount.
- r
- Monthly interest rate — the annual rate divided by 12.
- n
- Number of monthly payments over the life of the loan.
- M
- Monthly payment — the fixed amount paid each month.
Worked Examples
Example 1: $20,000 personal loan
A $20,000 loan at 6% APR for 5 years (60 months) has a monthly payment of $386.66, with total interest paid of about $3,199 over the life of the loan.
Example 2: $300,000 mortgage
A $300,000 mortgage at 6.5% APR for 30 years (360 months) has a monthly payment of $1,896.20, with total interest paid of about $382,632 over the life of the loan.
Key Concepts
Amortization front-loads interest: Early payments are mostly interest, while later payments are mostly principal, since interest is calculated on the remaining balance.
APR vs. interest rate: APR includes the interest rate plus certain fees, giving a more complete picture of the loan's true cost.
Extra principal payments: Paying extra toward principal reduces total interest disproportionately by shrinking the balance interest accrues on sooner.
Common Mistakes
Using the annual rate directly: The annual interest rate must be converted to a monthly rate (divided by 12) before calculating payments.
Ignoring fees vs. APR: The stated interest rate doesn't include fees — APR gives a more accurate picture of the loan's true cost.
Assuming even principal/interest splits: Payments aren't evenly split between principal and interest throughout the loan — the split shifts over time.
Frequently Asked Questions
Your payment is calculated using an amortization formula based on the loan amount, monthly interest rate (annual rate divided by 12), and total number of monthly payments.
Amortized loans front-load interest because it's calculated on the remaining balance each month — early on, the balance is highest, so more of each payment goes to interest rather than principal.
The interest rate is the cost of borrowing the principal alone. APR (Annual Percentage Rate) includes the interest rate plus certain fees, giving a more complete picture of the loan's true cost.
Extra payments toward principal typically reduce your loan term (you pay it off sooner) rather than your required monthly payment, unless you specifically request re-amortization from your lender.