Loan Calculator
Calculate monthly loan payments with a full amortization schedule.
Monthly Payment
$489.15
| Month | Payment | Principal | Interest | Balance |
|---|---|---|---|---|
| 1 | $489.15 | $353.74 | $135.42 | $24,646.26 |
| 2 | $489.15 | $355.65 | $133.50 | $24,290.61 |
| 3 | $489.15 | $357.58 | $131.57 | $23,933.03 |
| 4 | $489.15 | $359.52 | $129.64 | $23,573.51 |
| 5 | $489.15 | $361.46 | $127.69 | $23,212.05 |
| 6 | $489.15 | $363.42 | $125.73 | $22,848.63 |
| 7 | $489.15 | $365.39 | $123.76 | $22,483.24 |
| 8 | $489.15 | $367.37 | $121.78 | $22,115.87 |
| 9 | $489.15 | $369.36 | $119.79 | $21,746.51 |
| 10 | $489.15 | $371.36 | $117.79 | $21,375.15 |
| 11 | $489.15 | $373.37 | $115.78 | $21,001.78 |
| 12 | $489.15 | $375.39 | $113.76 | $20,626.38 |
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How Loan Payments Are Calculated
The monthly payment formula is: M = P × [r(1+r)^n] / [(1+r)^n - 1]
Where P is the principal, r is the monthly interest rate (annual rate / 12), and n is the total number of payments. The final payment is adjusted to clear the remaining balance.
The interest portion falls as the balance decreases, while more of a level payment reduces principal. Whether early payments are mostly interest depends on the rate and term. Use our amortization calculator to see the full month-by-month breakdown.
How Interest Rate Affects Your Payment
On a $300,000 loan over 30 years:
| Interest Rate | Monthly Payment | Total Interest Paid |
|---|---|---|
| 5% | $1,610 | $279,767 |
| 6% | $1,799 | $347,515 |
| 7% | $1,996 | $418,527 |
| 8% | $2,201 | $492,467 |
In this illustration, moving from 5% to 8% raises the monthly principal-and-interest payment from about $1,610 to $2,201. Actual offers can include fees and other costs.
Compare the Full Cost of Loan Offers
This calculator models a fixed interest rate with monthly payments. It does not include origination charges, insurance, taxes, or other fees. Compare the lender's disclosures as well as the payment shown here.
The annual percentage rate (APR) can include charges beyond the interest rate, so do not treat the two as interchangeable. The CFPB explains the difference between interest rate and APR.
Compare the loan term and any disclosed fees before deciding which offer costs less. The CFPB lists common installment-loan fees.
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How this is calculated
The calculator uses the standard fixed-rate amortization formula for a loan paid in equal monthly installments.
Formulas
The monthly rate is the annual rate divided by 12.
r = rate ÷ 100 ÷ 12
The level monthly payment over n months is:
payment = P × r ÷ (1 − (1 + r)⁻ⁿ)
At 0% interest the payment is the amount divided by the number of months.
payment = P ÷ n
Each month, interest is the balance times r, and whatever is left of the payment reduces the balance.
interest = balance × r; principal = payment − interest
Total interest is everything you pay minus the amount borrowed.
interest = payment × n − P
Sources
- Consumer Financial Protection Bureau, What is amortization and how could it affect my auto loan?. Explains how each payment on an amortizing loan splits between interest and principal.
How we test this
This tool is checked against independent formulas every time the site is released, and a release does not ship if a check fails. Example from the test suite: $25,000 at 8% for 60 months gives $507 a month, $5,415 total interest. The test finds the payment by bisection, narrowing the payment until the balance ends at zero, without the closed-form formula.
The test is “loan: fixed-rate schedule payment, interest and total match the oracle” in tests/golden-calculators.test.mjs. More on how all tools are tested: our testing approach.
Assumptions and limits
- Fixed rate and equal monthly payments. Origination fees, insurance and taxes are not included.
- The APR on a lender's offer can include fees that this interest-rate calculation does not, so compare disclosures before choosing.
- An estimate for planning, not a loan offer or financial advice.
Last reviewed , the date of the latest change to this tool's calculation or content.
Navigation
When to use this
You're comparing two loan offers and they both look reasonable — until you calculate the total interest. For a $25,000 fixed-rate loan over 5 years, 8% produces about $5,415 in interest; 10% produces about $6,871. That is approximately $1,456 more in interest before fees. This calculator shows the principal-and-interest estimate, not the full lender quote.
It's also the right tool when you're deciding between loan terms. A longer term means lower monthly payments but dramatically more interest. A shorter term means higher payments but you're debt-free sooner and pay less overall. The amortization schedule makes the tradeoff concrete — you can see exactly how much of each payment goes to principal vs. interest, month by month.
Use it for any fixed-rate loan: personal loans, student loans, home equity loans, or equipment financing. If the rate is fixed and the term is set, the math is the same.
Good to know
The split depends on rate and term. On a $30,000 fixed-rate loan at 7% over 5 years, the first payment is about $594: $175 interest and $419 principal. The interest amount then falls as the balance falls. Early payments are not necessarily mostly interest.
Compare total interest, not only the payment. A $20,000 loan at 6% costs about $608 per month over 3 years, with about $1,904 in total interest. Over 5 years it costs about $387 per month but about $3,199 in interest, before fees.
APR is not the same as interest rate. APR can include loan charges in addition to interest. This calculator takes an interest rate and omits fees, so compare the lender's disclosed APR and charges separately. See the CFPB's interest-rate and APR explanation.
Need to model extra payments? Use the amortization calculator to estimate their effect when applied to principal. Check the loan's actual payment and prepayment terms with the lender.
Quick Reference
| Loan Amount | Rate | Term | Monthly Payment | Total Interest |
|---|---|---|---|---|
| $10,000 | 6% | 3 years | $304 | $952 |
| $10,000 | 6% | 5 years | $193 | $1,600 |
| $25,000 | 8% | 5 years | $507 | $5,415 |
| $50,000 | 7% | 7 years | $755 | $13,389 |
| $50,000 | 10% | 5 years | $1,062 | $13,741 |
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