Loan Calculator

Calculate loan payments, total interest, and amortization

About Loan Calculator

A loan calculator determines your monthly payment, total interest paid, and full amortization schedule based on the loan amount, interest rate, and term. It applies to auto loans, personal loans, student loans, and any fixed-rate installment loan.

Formula

Monthly Payment = P × [r(1+r)^n] / [(1+r)^n − 1], where P = principal, r = monthly interest rate, n = number of payments

How It Works

Enter the loan amount (principal), annual interest rate, and loan term
The calculator converts the annual rate to a monthly rate and the term to a number of monthly payments
It applies the amortization formula to find a fixed monthly payment
Total interest paid is the sum of all payments minus the original principal
An amortization schedule shows how each payment splits between principal and interest over time

Tips

Early payments go mostly toward interest; later payments go mostly toward principal — this is normal for amortizing loans
Making extra principal payments early in the loan term saves more interest than making them later
A longer loan term lowers your monthly payment but increases total interest paid

Frequently Asked Questions

How is my monthly loan payment calculated?

Using the amortization formula: Payment = P × [r(1+r)^n] / [(1+r)^n − 1], where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments.

Why do I pay so much interest early in the loan?

Interest is charged on the remaining balance, which is highest at the start, so a larger share of each early payment covers interest; as the balance shrinks, more of each payment goes to principal.

How much can I save by paying extra toward my loan?

Extra payments reduce the principal balance directly, which reduces the interest charged on all future payments, shortening the loan term. Even modest extra payments early in the loan can save significant total interest.

What's the difference between loan term and amortization period?

For most personal and auto loans they're the same. For some mortgages, the amortization period (used to calculate the payment) can be longer than the loan term (when the balance is due or refinanced), which matters for balloon-payment loans.

Does a shorter loan term always cost less overall?

Usually yes — a shorter term means less time for interest to accrue, so total interest paid is lower, even though the monthly payment is higher.