Loan Calculator
Calculate monthly payments and total interest on a loan.
About Loan Calculator
Work out exactly what a loan will cost you with this free loan calculator. Enter the amount you want to borrow, the annual interest rate (APR), and the term, and you'll instantly see your monthly payment, the total interest you'll pay over the life of the loan, and the total amount repaid. It uses the same standard amortization formula that banks use, so it works for personal loans, auto loans, student loans, and mortgages alike. Adjust the numbers to compare offers and understand how the rate and term change your monthly payment before you sign anything.
How to use this tool
- 1Enter the loan amount you want to borrow.
- 2Enter the annual interest rate (APR).
- 3Set the loan term in years.
- 4See your monthly payment, total interest, and total repayment instantly.
How loan payments are calculated
Fixed loan payments use the amortization formula: M = P × [r(1+r)ⁿ] ÷ [(1+r)ⁿ − 1], where P is the amount borrowed, r is the monthly interest rate, and n is the number of payments. Early payments are mostly interest; later payments are mostly principal.
Worked example: borrow $20,000 at 6% APR for 5 years. The monthly rate is 0.5% and n is 60 payments, giving a payment of about $386.66. Over the life of the loan you pay roughly $3,200 in interest.
| Term | Monthly payment | Total interest paid |
|---|---|---|
| 3 years | $608.44 | ≈ $1,904 |
| 5 years | $386.66 | ≈ $3,199 |
| 7 years | $292.13 | ≈ $4,539 |
| 10 years | $222.04 | ≈ $6,645 |
Stretching the term lowers the monthly payment but raises the total cost - the 10-year option costs over 3× the interest of the 3-year one. If cash flow allows, a shorter term almost always wins.
Frequently asked questions
How is the monthly payment calculated?
It uses the standard amortization formula: M = P * r(1+r)^n / ((1+r)^n - 1), where P is the principal, r the monthly rate, and n the number of payments.
Does this work for mortgages and car loans?
Yes. Any fixed-rate amortized loan works: mortgages, auto loans, personal loans, and student loans. It doesn't cover taxes, insurance, or fees.
Related guide
7 min readHow Mortgage Payments Actually Work (Amortization Explained)
Where your mortgage payment really goes each month, why early payments are almost all interest, and how extra payments save tens of thousands.