Loan Calculator

Q: How is a monthly loan payment calculated?

Monthly payment is calculated using the standard amortization formula: M = P × [r(1+r)^n] / [(1+r)^n - 1], where P is the principal, r is the monthly interest rate (APR / 12), and n is the number of monthly payments. This gives a fixed payment that covers both principal and interest each month.

Q: What is an amortization schedule?

An amortization schedule shows how each payment is split between principal and interest over the life of the loan. In the early months, most of your payment goes toward interest. Over time, as your balance decreases, more of each payment goes toward principal. This calculator shows a year-by-year summary.

Q: Does a shorter loan term always save money?

Yes — a shorter loan term means you pay interest for fewer months, so your total interest paid is significantly lower. The trade-off is a higher monthly payment. For example, a $20,000 loan at 8% APR over 3 years costs about $1,900 in interest; the same loan over 6 years costs about $4,000 in interest — more than double.

Q: What is APR vs interest rate?

The interest rate is the base cost of borrowing the principal. APR (Annual Percentage Rate) includes the interest rate plus any fees (origination fees, closing costs), making it the true cost of the loan. Always compare loans by APR, not just interest rate. This calculator uses APR for accuracy.

Calculate your monthly payment, total interest, and see a full amortization breakdown for any loan — personal, auto, mortgage, or student.

Loan Amount

Annual Interest Rate (APR)

Loan Term

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Monthly Payment

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Total Interest Paid

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Total Amount Paid

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Principal + interest

Payoff Date

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Principal Interest

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Monthly Payment	—	—
Payoff	—	—
Total Interest	—	—
Interest Saved	—	—

Disclaimer: These results are estimates for informational and educational purposes only. They do not constitute financial, lending, or legal advice. Actual loan terms, payments, and interest may differ from lender to lender. Full disclaimer →

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Frequently Asked Questions

How is a monthly loan payment calculated?

Monthly payment uses the standard amortization formula: M = P × [r(1+r)^n] / [(1+r)^n − 1], where P is the principal, r is the monthly interest rate (APR ÷ 12), and n is the total number of payments. This produces a fixed payment that covers both interest and principal each month, with the split shifting toward more principal over time.

What is an amortization schedule?

An amortization schedule breaks down each payment into how much goes toward interest vs. principal. Early in the loan, most of your payment covers interest. As your balance shrinks, more goes toward principal. The year-by-year table in this calculator shows your running balance and cumulative costs so you can see the full picture.

Does a shorter loan term always save money?

Yes — a shorter term means you pay interest for fewer months, dramatically reducing total interest. A $20,000 loan at 8% APR over 3 years costs ~$1,900 in interest; over 6 years it's ~$4,000 — more than double. The trade-off is a higher monthly payment. Use this calculator to find the term that balances monthly affordability and total cost.

What is APR vs. interest rate?

The interest rate is the base cost of borrowing. APR (Annual Percentage Rate) includes the interest rate plus origination fees and other charges, making it the true cost of the loan. Always compare loans by APR rather than the stated interest rate. This calculator uses APR for accurate results.