Category
Finance
Enter Loan Details
Estimate monthly payment, total interest, and overall borrowing cost.
$
Use the annual percentage rate for this loan. The calculator converts it to a monthly rate for payment math.
%
Enter total repayment length in years. Longer terms lower monthly payments but usually increase total interest.
years
Fees added to your loan balance at closing. Leave 0 if you plan to pay fees upfront.
$
Loan Planning Tips
- Higher down payments reduce monthly payments and total interest.
- Shorter terms cost more each month but lower long-term interest.
- Compare offers using the same term and principal for a fair view.
How Loan Payments Are Calculated
Loan payments use a standard amortization formula that spreads principal and interest across equal monthly payments.
M = P * (r * (1 + r)^n) / ((1 + r)^n - 1)
M- monthly payment amount
P- principal loan amount (borrowed amount + financed fees)
r- monthly interest rate (APR / 12 as decimal)
n- total number of payments (months)
- Lower rates and shorter terms reduce total borrowing cost.
- Financing fees increase the principal used in the payment formula.
- Extra principal payments can shorten payoff time and reduce interest.
- Compare loan options by total paid, not only monthly payment.
Example Scenarios
Small personal loan
$12,000 at 8.5% for 3 years
~$379/month
Auto loan
$28,000 at 6.9% for 5 years
~$553/month
Debt consolidation
$40,000 at 10% for 7 years
~$664/month
Frequently Asked Questions
What affects my monthly payment most?
Loan amount and term usually have the largest impact, followed by the interest rate.
Is APR the same as interest rate?
APR often includes certain fees, while the interest rate is the base borrowing rate.
Can I pay off a loan early?
Often yes, but some loans include prepayment penalties. Check your lender terms.
Why does a longer term cost more overall?
Because interest accrues for more months even though each payment is lower.
Amortization Schedule
Loading schedule...
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