Loan Calculator
Calculate monthly loan payments with a full amortization schedule.
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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. This formula ensures the loan is exactly paid off with the final payment.
In the early months of a loan, most of each payment goes toward interest. As the balance decreases, more of each payment reduces the principal. This is called amortization. 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 |
Each 1% increase in rate adds roughly $190--$200/month and $70,000--$75,000 in total interest. This is why rate shopping matters -- even a 0.25% difference saves meaningful money over time.
Tips for Getting a Lower Interest Rate
A higher credit score is the single biggest factor. Lenders offer their best rates to borrowers with scores above 740--760. Even improving from 680 to 720 can save half a percentage point.
Shop at least three lenders. Rates vary more than most borrowers realize, even for the same loan amount and credit profile. Pre-approval applications within a 45-day window count as one inquiry for credit scoring purposes.
Consider paying points. One discount point costs 1% of the loan amount and typically reduces the rate by 0.25%. Do the math: if you plan to stay in the home long enough, it pays for itself.
When to use this
You're comparing two loan offers and they both look reasonable — until you calculate the total interest. A $25,000 personal loan at 8% over 5 years costs $5,416 in interest. The same loan at 10% costs $6,872. That 2% difference is $1,456 you'll never see again. This calculator shows you those numbers before you sign anything.
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
Early payments are almost all interest. On a $30,000 loan at 7% over 5 years, your first payment is $594 — but $419 goes to interest and only $175 to principal. By your last year, nearly the entire payment goes to principal. This is why extra payments early in the loan save the most money.
The monthly payment isn't the true cost. A $20,000 loan at 6% over 3 years costs $608/month. Over 5 years, it's $387/month — sounds better, right? But the 3-year total cost is $21,888 while the 5-year total is $23,199. That "lower" payment costs you $1,311 extra.
APR ≠ interest rate. The Annual Percentage Rate includes fees and origination charges, making it the better comparison metric between lenders. Two loans with the same interest rate can have different APRs if one charges higher fees.
One extra payment per year matters. On a $30,000 loan at 7% over 5 years, making one extra monthly payment per year saves ~$700 in interest and pays off the loan 6 months early. It's one of the simplest debt-reduction strategies.
Quick Reference
| Loan Amount | Rate | Term | Monthly Payment | Total Interest |
|---|---|---|---|---|
| $10,000 | 6% | 3 years | $304 | $944 |
| $10,000 | 6% | 5 years | $193 | $1,600 |
| $25,000 | 8% | 5 years | $507 | $5,416 |
| $50,000 | 7% | 7 years | $754 | $13,355 |
| $50,000 | 10% | 5 years | $1,062 | $13,748 |