Loan Calculator
Our loan calculator works for any type of loan — personal loans, auto loans, student loans, and more. See your monthly payment, total interest, and total cost instantly.
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Calculator
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Formula
M = P × [r(1+r)^n] / [(1+r)^n - 1]
M is the monthly payment, P is the loan principal, r is the monthly interest rate (annual rate ÷ 12), and n is the number of monthly payments. This is a standard amortization formula used for all fixed-rate installment loans.
How to use the Loan Calculator
- 1
Enter your loan amount
Value should be in $.
- 2
Enter your annual interest rate
Value should be in %.
- 3
Enter your loan term
Value should be in months.
- 4
Read your results instantly
Results update in real time as you type.
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How loan payments are calculated
Every loan payment you make is split between interest and principal. Early payments are heavily weighted toward interest — in the first month, almost all of your payment is interest. Over time, the principal balance falls, reducing the interest charged, and more of each payment goes to paying down the loan.
This is why paying off a loan early (making extra principal payments) saves disproportionately large amounts of interest — you're collapsing the interest-heavy early period.
Comparing loan offers
Two loans with the same amount and monthly payment can have very different total costs depending on the term and rate. A 3-year loan at 8% costs far less in total interest than a 5-year loan at 6%, even though the monthly payment on the latter is lower.
When comparing offers, always look at Total Cost of the loan — not just the monthly payment. Lenders are required by law (TILA) to disclose the APR and total finance charge, making comparison straightforward.
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Types of loans this calculator works for
Personal loans: typically $1,000–$50,000, 12–84 month terms, 6–36% APR depending on credit. Auto loans: typically 36–72 months, 5–15% APR. Student loans: federal loans around 5–7% fixed; private loans vary. Business loans: highly variable — use your actual offer terms.
For mortgages, use the dedicated mortgage calculator which also handles taxes and insurance.
Tips & Insights
Your credit score is worth money
A 750+ credit score might qualify you for a 6% personal loan while a 620 score gets 20%. On a $20,000 loan over 5 years, that difference costs over $6,000 in extra interest.
Shorter terms mean lower total cost
A 36-month auto loan costs significantly less than a 72-month loan for the same amount, even if the monthly payment is higher. Calculate total interest before choosing a longer term for convenience.
Prepayment penalties exist — check first
Some lenders charge a fee for paying off a loan early. Always check for prepayment penalties before making extra payments. Most personal and auto loans have none, but some do.
Worked Examples
Auto loan
Monthly payment of approximately $561. Total paid: $33,660. Total interest: $5,660 — about 20% of the loan amount over 5 years.
Personal loan comparison
At 9%: $318/month, $1,434 total interest. At 18%: $362/month, $3,027 total interest. Improving your credit score to qualify for the lower rate saves $1,593 on this loan alone.
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Frequently Asked Questions
How do I lower my monthly loan payment?
You can lower your monthly payment by securing a lower interest rate, extending the loan term, or making a larger down payment.
What is APR?
APR (Annual Percentage Rate) includes the interest rate plus any fees, expressed as a yearly cost. It's a more complete picture of loan cost than the interest rate alone.
What is amortization?
Amortization is the process of paying off a loan through regular installments. Each payment covers interest first, with the remainder reducing principal. A full amortization schedule shows this breakdown for every payment.
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