Loan Calculator
Estimate your monthly payment, total interest, and total cost on a fixed-rate loan.
Learn how it works: How to Calculate a Loan Payment by HandEnter your loan amount, rate, and term to see the payment.
How to use the loan calculator
Three numbers shape every fixed-rate loan: how much you borrow, the interest rate, and how long you take to pay it back. Enter all three and the payment appears.
- Type the loan amount you need.
- Enter the annual interest rate your lender quoted.
- Tap a common term or type your own number of years in the custom field.
- Read the monthly payment at the top, with total interest, total cost, and the principal-to-interest split below.
How loan payments are calculated
A fixed-rate loan uses amortization. You pay the same amount every month, but the split inside that payment shifts over time. Early on, a large slice goes to interest because the balance is still high. As the balance falls, more of each payment chips away at the principal.
By the final payment, almost all of it is principal and the interest share is tiny. The calculator works out the single monthly figure that clears the balance to zero by the end of the term, then adds up the interest you pay along the way.
What affects your monthly payment
Three levers move the number, each in a different direction:
- Loan amount. Borrow more and every payment rises in step.
- Interest rate. A higher rate raises the payment and, more sharply, the total interest over the life of the loan.
- Term. A longer term lowers each monthly payment but stretches interest across more months, so you pay more in total.
Try a few combinations to see the trade-off. A shorter term costs more each month but far less overall.
The loan payment formula
The standard amortization formula is:
M = P × [ r(1 + r)ⁿ ] / [ (1 + r)ⁿ − 1 ]
Here P is the principal, r is the monthly rate (the annual rate divided by 12), and n is the number of monthly payments. Borrow $25,000 at 6.5% over 10 years and the monthly payment comes to $283.87. Across 120 payments that totals $34,064.40, of which $9,064.40 is interest. When the rate is zero, the formula reduces to the amount divided by the number of payments.
This figure is an estimate of principal and interest only. Real loans can add property taxes, insurance, origination fees, or other charges, so confirm the full cost with your lender before you commit.
Frequently asked questions
- How is a monthly loan payment calculated?
- The calculator uses the standard amortization formula, which finds the fixed monthly amount that pays off the balance by the end of the term. It blends interest on the remaining balance with a share of the principal each month.
- Does a longer loan term mean lower payments?
- Yes, spreading the balance over more months lowers each payment. The trade-off is that interest accrues for longer, so the total cost of the loan is higher. A shorter term costs more monthly but less overall.
- What is the difference between interest rate and APR?
- The interest rate is the cost of borrowing the principal. APR, or annual percentage rate, folds in certain fees as well, so it is usually a little higher. This calculator uses the interest rate you enter, not APR.
- How can I lower my monthly payment?
- You can borrow less, find a lower rate, or choose a longer term. A longer term cuts the monthly figure but raises total interest, so weigh the monthly relief against the long-run cost.
- Does this include taxes, insurance, and fees?
- No. The result covers principal and interest only. Many loans add taxes, insurance, or origination fees on top, so your real payment may be higher. Ask your lender for the full breakdown.
- Should I rely on this for a real loan decision?
- Treat it as an estimate for planning and comparison. For an actual loan, confirm the exact terms and total cost with the lender or a qualified financial adviser before signing.