Loan Calculator
Loan Calculator
Calculate monthly payments for personal and auto loans
Quick Tips
- Compare APR, not just the rate — APR includes lender fees and shows the true annual cost.
- Even a small extra payment each period can save real money in interest — try the slider above.
- Switching to bi-weekly payments is like sneaking in one extra monthly payment a year.
- Shop at least 3 lenders — rates for the same borrower can vary meaningfully.
Monthly Payment
$513
Principal
$25,000
Total Interest
$5,775
| Period | Principal | Interest | Balance |
|---|
Loan Amount
$25,000
Total Interest
$5,775
Total Paid
$30,775
Payoff
60 payments
Last updated: August 7, 2026
How This Loan Calculator Works
This calculator uses the standard amortization formula that lenders use to compute fixed-rate loan payments. Enter your loan amount, interest rate, term, and payment frequency, and it instantly shows your payment, total interest, and a full period-by-period amortization schedule — the same math a bank runs, just transparent.
The Amortization Formula
Every fixed-rate, fixed-term loan payment is calculated with:
M = P × [r(1+r)n] / [(1+r)n − 1]
- M — your payment per period
- P — the principal (loan amount, after any down payment, plus any financed fees)
- r — the interest rate per period (annual rate ÷ payments per year)
- n — the total number of payments over the loan's life
Each payment is split between interest (calculated on the current balance) and principal (which reduces the balance for next time). Because the balance shrinks every period, the interest portion shrinks too — even though your total payment stays the same the whole way through.
Worked Example
Say you borrow $25,000 at 8.5% APR for 60 months (5 years), paid monthly:
- Periodic rate r = 8.5% ÷ 12 = 0.007083
- Number of payments n = 60
- Monthly payment M ≈ $513
- Total paid over 5 years ≈ $30,780
- Total interest ≈ $5,780
Now add $100 extra toward principal every month: the loan pays off roughly a year early and saves over $1,000 in interest — because every extra dollar stops accruing interest immediately instead of sitting on the balance for years. Try it yourself with the extra payment slider above.
Rate vs. APR, and Where Fees Hide
The interest rate is only part of the cost. Origination fees, processing fees, and points can add real money to a loan even when the headline rate looks attractive. APR folds most of these into a single annualized number, which is why comparing APR — not just the rate — is the more reliable way to shop lenders. If a fee is financed into the loan rather than paid upfront, you also pay interest on the fee itself for the life of the loan.
Choosing a Loan Term
A longer term lowers your periodic payment but increases total interest, since you're borrowing the money for more time. A shorter term raises the payment but cuts total interest meaningfully. There's no universally "right" answer — it's a trade-off between monthly affordability and total cost, and the calculator above lets you compare both instantly by toggling the term.
Why Extra Payments Are So Powerful Early On
Amortized loans front-load interest: early payments are mostly interest, later payments are mostly principal, because interest is always calculated on whatever balance remains. An extra payment made in month 3 keeps that money from accruing interest for the rest of the loan's life — while the same extra payment made in month 55 only saves a few months of interest. If you're deciding whether to pay down a loan faster, earlier extra payments almost always deliver a better return.
Payment Frequency Matters More Than You'd Think
Switching from monthly to bi-weekly payments means 26 payments a year instead of 12 — the equivalent of one extra monthly payment annually, with no other change to your budget. That alone can shave months off a loan and reduce total interest, which is why the payment frequency field above isn't just a formatting choice.
How we calculate this
- Method
- Standard amortizing loan payment
- Formula
-
M = P × i(1 + i)ⁿ ÷ ((1 + i)ⁿ − 1), where i = annual rate ÷ 12 and n = term in months - Source
- The standard closed-form annuity payment formula for fully amortizing fixed-rate loans.
- Limitations
- Assumes a fixed rate and equal monthly payments. Fees, insurance and early-repayment charges are not included unless you enter them.
- Last reviewed
Found a discrepancy? Tell us and we will check it — corrections are published on this page. Report an issue
Frequently Asked Questions
Lenders use the standard amortization formula: payment = P × [r(1+r)^n] / [(1+r)^n − 1], where P is the loan amount (principal), r is the interest rate per payment period, and n is the total number of payments. This produces a fixed payment where the interest portion is highest at the start and shrinks over time as your balance goes down.
The interest rate is the cost of borrowing the principal, expressed as a yearly percentage. APR (Annual Percentage Rate) includes the interest rate plus most lender fees (origination fees, points, some closing costs), giving you a more complete picture of the loan's true annual cost. Always compare APR, not just the rate, when shopping lenders.
A longer term lowers your payment per period but increases total interest paid, since you're borrowing the money for longer. A shorter term raises your payment but reduces total interest substantially. For example, doubling a loan term roughly doubles the number of payments even though each payment is smaller, and the extra time at a similar average balance adds meaningfully more interest.
Extra payments go straight to principal, which reduces the balance that future interest is calculated on. Because amortized loans front-load interest, extra payments made earlier in the loan save more than the same amount made later. Use the extra payment slider on this calculator to see your specific interest and time savings.
They save similar amounts of interest if you're disciplined, but a longer term with optional extra payments gives you flexibility - you can pay extra in good months and fall back to the lower required payment if money is tight. A shorter term locks you into the higher payment every month regardless.
An origination fee is an upfront charge (flat dollar amount or percentage of the loan) that some lenders charge to process and fund the loan. It's often financed into the loan amount rather than paid separately, which means you pay interest on the fee too - factor it into your comparison between lenders.
Switching from monthly to bi-weekly payments (26 payments/year, equivalent to 13 monthly payments) accelerates payoff and reduces total interest, because you're effectively making one extra monthly payment per year. Weekly and quarterly frequencies shift the math similarly - more frequent payments generally mean less average balance and less interest.
Missing a payment typically triggers a late fee, can damage your credit score if reported (usually after 30 days past due), and interest keeps accruing on your balance regardless. Some lenders offer a grace period before penalties apply - check your loan agreement. Missed payments are not reflected in this calculator's projections, which assume on-time payments.
It depends on the lender and loan type - many personal, auto, and student loans have no prepayment penalty, but some loans (particularly certain mortgages and a subset of personal loans) charge a fee for paying off early because it cuts into the lender's expected interest income. Always check your loan terms before making large extra payments.
This calculator uses the same standard amortization formula lenders use, so the payment and interest figures are mathematically accurate for a fixed-rate loan with the inputs you provide. Your actual loan may differ slightly due to rounding conventions, day-count methods, variable rates, or fees your lender applies differently than modeled here - use this as a close estimate, and confirm exact figures with your lender.
Rate tiers vary by lender and loan type, but generally scores above 720-740 unlock the best available rates, 690-719 gets good rates, 630-689 is fair (higher rates), and below 630 often means limited options or much higher rates. Shop multiple lenders since underwriting criteria differ significantly between them.
Secured loans (backed by collateral like a car or savings account) typically offer lower rates because the lender has recourse if you default. Unsecured loans (personal loans, most credit cards) charge higher rates to offset the lender's added risk, but you don't risk losing a specific asset if you can't pay. Choose based on the rate savings versus what you're comfortable putting at risk.
The main levers are: extending the loan term (lowers payment, raises total interest), increasing your down payment if applicable (reduces the principal financed), improving your credit before applying (unlocks lower rates), or refinancing later if rates drop or your credit improves. Try adjusting the term and down payment fields above to see the trade-offs.
Amortization is the process of paying off a loan through regular, fixed payments where each payment covers that period's interest plus a portion of principal. Early payments are interest-heavy; later payments are principal-heavy, even though the total payment amount stays the same throughout a fixed-rate loan. The amortization table on this page shows that breakdown period by period.
Interest for each period is calculated on your remaining balance. As you pay down principal, the balance shrinks, so the interest charged each period shrinks too - and since your total payment is fixed, more of it goes toward principal instead. This compounding effect is why extra principal payments early in a loan are so much more powerful than the same payment made later.
Yes - the underlying amortization math is the same for personal, auto, student, home equity, and business loans as long as it's a standard fixed-rate, fixed-term loan. Select your loan type above for a sensible default interest rate, then adjust the amount, rate, and term to match your actual offer.
A down payment is money paid upfront that reduces the amount you need to borrow. It's typically required for secured loans like auto and home equity loans, and a larger down payment usually means a lower monthly payment, less total interest, and sometimes a better interest rate since the lender is financing a smaller, lower-risk amount.
Compare the APR first (it accounts for fees), then look at total cost over the loan's life (payment × number of payments), not just the monthly payment. A loan with a lower monthly payment but a longer term or higher fees can easily cost more overall - run each offer through this calculator separately to see the real total cost side by side.
Total cost is your original loan amount plus all interest paid over the full term, plus any fees you finance into the loan (like an origination fee). The "Total Paid" and "Total Interest" figures in your results above already include this - it's usually meaningfully higher than the loan amount alone, especially for longer terms or higher rates.
No - this calculator computes the loan payment and interest schedule only. Some loan interest (for example, certain business loans or home equity loans used for home improvement) may be tax-deductible depending on your jurisdiction and how the funds are used. Consult a tax professional for guidance specific to your situation.
A fixed-rate loan locks your interest rate for the entire term, so your payment never changes - this calculator models fixed-rate loans. A variable-rate loan's rate moves with a benchmark index, so your payment can rise or fall over time. Variable rates often start lower but carry the risk of increasing later; fixed rates trade a possibly higher starting rate for payment certainty.
Debt-to-income ratio (DTI) is your total monthly debt payments divided by your gross monthly income. Most lenders cap DTI (often around 36-43%, including the new loan) when deciding how much to approve - a lower DTI generally means easier approval and better rates, since it signals more room in your budget to absorb the new payment.
Refinancing usually makes sense when interest rates have dropped meaningfully since you took out the loan, your credit score has improved enough to qualify for a better rate, or you want to change the term (shorter to save interest, longer to lower payments). Weigh any refinancing fees against the interest you'd actually save - run both scenarios through this calculator to compare.
Installment loans (personal, auto, student) use fixed-term amortization like this calculator models - a set payment schedule with a defined payoff date. Credit cards charge revolving interest on whatever balance you carry month to month, with no fixed payoff date unless you commit to one. Credit card APRs are also typically much higher than installment loan rates.
Common requirements include proof of income (pay stubs, tax returns, or bank statements), identification, proof of address, and for secured loans, documentation of the collateral (like a vehicle title or property deed). Requirements vary by lender and loan type - business loans typically require more extensive financial documentation than personal loans.
Yes - use the country selector above the calculator to switch currency and see realistic local default loan amounts and rates for that country. The amortization math itself is currency-agnostic; only the currency symbol, number formatting, and starting defaults change.
Different loan types carry meaningfully different typical rates in the real market - secured loans like auto loans tend to have lower rates than unsecured personal loans, for example. This calculator auto-fills a realistic starting rate for whichever loan type you select (adjusted for your chosen country), but you should always replace it with the actual rate from your lender's offer.
A co-signer is someone who agrees to be legally responsible for the loan if you don't pay, using their credit history and income to strengthen your application. Lenders may require one if your credit history is thin or your income doesn't comfortably support the payment on its own. A co-signer's credit is affected by the loan too, including any missed payments.
If you're juggling multiple loans, the "avalanche" method (highest interest rate first) saves the most money mathematically. The "snowball" method (smallest balance first) pays more in total interest but delivers faster psychological wins as individual loans get eliminated, which helps some people stay motivated. Either beats making only minimum payments everywhere.
Yes - payment history is typically the single largest factor in most credit scoring models. Consistent on-time payments on an installment loan build positive payment history and can also improve your credit mix (a factor that rewards having both revolving and installment credit), while late or missed payments do significant damage that takes time to recover from.
Payment
$513