Loan calculator
Enter your loan amount, interest rate, and term to see your fixed monthly payment, the total interest you'll pay over the life of the loan, and a month-by-month amortization schedule. Below the calculator, we show exactly how the payment is worked out.
Estimates a fixed-rate, fully-amortizing loan. Your real loan may include fees, insurance, or a variable rate — see the disclaimer below.
How to use this calculator
Three inputs drive the result. The loan amount (also called the principal) is how much you're borrowing. The annual interest rate is your loan's APR before any fees — enter 7.5 for 7.5%, not 0.075. The term is how long you'll take to repay it, in years. Press calculate and you'll see your fixed monthly payment, followed by an amortization schedule showing how each payment splits between interest and principal.
How loan payments are calculated
A standard fixed-rate loan uses the amortization formula below. It's the same equation lenders use to make sure your payment is exactly large enough to clear the balance — and the interest on it — by the final month.
Where:
- M = monthly payment
- P = principal (the amount borrowed)
- r = monthly interest rate = annual rate ÷ 12 ÷ 100
- n = total number of payments = years × 12
The "amortization" part means that although your monthly payment stays the same, what it buys changes over time. Early on, most of each payment goes to interest because the balance is large. As the balance shrinks, more of every payment chips away at principal. That's why the schedule above shows the interest column shrinking and the principal column growing month after month.
A worked example
Say you borrow $25,000 at 7.5% for 5 years. First convert the inputs: the monthly rate is 7.5 ÷ 12 ÷ 100 = 0.00625, and the number of payments is 5 × 12 = 60. Plug those into the formula and (1.00625)⁶⁰ ≈ 1.4533. The payment works out to about $500.95 a month. Over 60 payments that's roughly $30,057 paid in total, meaning about $5,057 of interest on top of the $25,000 you borrowed. The calculator above does all of this instantly and lays out the month-by-month breakdown.
Why your real payment might differ
This calculator models a clean, fixed-rate, fully-amortizing loan. Real loans often add things it can't see: origination or processing fees, mandatory insurance, a variable rate that changes over time, or a different compounding convention. An auto loan might bundle in tax and title; a personal loan might charge an upfront fee that effectively raises your cost. Treat the result as a solid estimate of the core repayment, then ask your lender for the APR and the total finance charge to capture everything else.
Frequently asked questions
What's the difference between interest rate and APR?
The interest rate is the cost of borrowing the principal. The APR (annual percentage rate) folds in certain fees, so it's usually a little higher and is the better number for comparing loans. This calculator uses a plain interest rate; if your lender quotes an APR that includes fees, entering the APR gives you a more complete picture of the cost.
Does paying extra each month help?
Yes, significantly — as long as your loan has no prepayment penalty. Any amount above the scheduled payment goes straight to principal, which shrinks the balance faster and cuts the total interest you'll pay. Even small extra amounts early in the loan have an outsized effect because that's when the balance, and therefore the interest, is largest.
Why is so much of my early payment interest?
Interest is charged on the outstanding balance, which is at its highest at the start. So early payments are mostly interest with a little principal. As the balance falls, the interest portion falls with it and more of each fixed payment goes to principal. The amortization schedule above shows this crossover clearly.
Can I use this for a car loan or personal loan?
Yes. Any fixed-rate, fixed-term installment loan — car, personal, student refinance, and many others — uses this same amortization math. Just remember that some loans add fees or insurance that this simplified model doesn't include.