Loan Calculator
Calculate monthly payments, total interest, and payoff timeline for any fixed-rate loan.
Loan Summary
Amortization Schedule
| Month | Payment | Principal | Interest | Balance |
|---|
What is a Loan Calculator?
A loan calculator is a digital tool that computes the monthly payment, total interest, and overall cost of a fixed-rate installment loan. It applies the standard amortization formula to split every payment into principal and interest portions, then shows how your balance declines month by month until the debt reaches zero.
Whether you are comparing a personal loan, auto financing, or a student loan, this free loan calculator lets you see the true price of borrowing before you sign anything. Enter three numbers — amount, rate, and term — and you instantly get a monthly payment estimate plus a complete amortization schedule. Everything runs locally in your browser, so your financial details never leave your device.
How to Use
- Enter the total amount you plan to borrow (the principal).
- Input the annual interest rate offered by your lender — for example, enter 7.5 for 7.5%.
- Specify the loan term in years and, optionally, pick a start date to see an exact payoff date.
- Click Calculate to view your monthly payment, total interest, and month-by-month amortization schedule.
The Loan Payment Formula
Fixed-rate installment loans use the standard amortization formula to set one level monthly payment:
M = P × r(1 + r)ⁿ / ((1 + r)ⁿ − 1)
- M — the monthly payment.
- P — the principal, or amount you borrow.
- r — the monthly interest rate: the annual rate divided by 12 and converted to a decimal. A 6% annual rate becomes 0.06 ÷ 12 = 0.005.
- n — the total number of monthly payments: the term in years multiplied by 12. A 5-year loan has 60 payments.
The total amount repaid is M × n, and the total interest is M × n − P. Because the balance is largest at the start, interest dominates the early payments; over time the principal share grows. That gradual shift is amortization, and the schedule above shows it line by line.
Worked Example: $25,000 at 6% for 5 Years
Suppose you borrow $25,000 at a 6% annual rate for 5 years. The variables are P = 25,000, r = 0.06 ÷ 12 = 0.005, and n = 5 × 12 = 60. Plugging them into the formula:
M = 25,000 × 0.005(1.005)⁶⁰ / ((1.005)⁶⁰ − 1) = $483.32
Over 60 months you repay 60 × $483.32 = $28,999.20 in total, which means the loan costs $28,999.20 − $25,000 = $3,999.20 in interest. In the very first month, $125.00 of your $483.32 payment covers interest while $358.32 reduces the principal; by the final months, almost the entire payment goes toward principal.
Monthly Payment Reference Table
Use this table to estimate payments at common rates and terms. Figures assume a fixed rate with no fees.
| Loan Amount | Rate (APR) | 3-Year Term | 5-Year Term |
|---|---|---|---|
| $10,000 | 4% | $295.24 | $184.17 |
| $10,000 | 6% | $304.22 | $193.33 |
| $10,000 | 8% | $313.36 | $202.76 |
| $10,000 | 10% | $322.67 | $212.47 |
| $25,000 | 4% | $738.10 | $460.41 |
| $25,000 | 6% | $760.55 | $483.32 |
| $25,000 | 8% | $783.41 | $506.91 |
| $25,000 | 10% | $806.68 | $531.18 |
| $50,000 | 4% | $1,476.20 | $920.83 |
| $50,000 | 6% | $1,521.10 | $966.64 |
| $50,000 | 8% | $1,566.82 | $1,013.82 |
| $50,000 | 10% | $1,613.36 | $1,062.35 |
Notice the pattern: doubling the amount doubles the payment, while stretching the term lowers the payment but increases total interest paid.
APR vs. Interest Rate
The interest rate is the percentage a lender charges on your outstanding balance each year — it drives the monthly payment. The annual percentage rate (APR) bundles the interest rate with certain lender fees, such as origination charges, into a single annualized figure. Because APR reflects fees, it is the better number for comparing offers: a 6% loan with a 2% origination fee can cost more overall than a 6.25% loan with no fees. Use the APR when shopping between lenders, and the interest rate when projecting payments with this calculator.
Secured vs. Unsecured Loans
A secured loan is backed by collateral — a car, a home, or a savings account — that the lender can claim if you stop paying. Because the lender takes on less risk, secured loans such as auto loans and mortgages usually carry lower rates and higher borrowing limits. An unsecured loan, like most personal loans, relies on your creditworthiness alone, so rates tend to be higher and approval depends on your credit score and income. The payment formula is identical for both types; what changes is the rate and term you qualify for.
The Total Cost of Borrowing
The monthly payment is only part of the story. Your true cost is the principal plus all interest and fees over the life of the loan. Term length matters: at 6%, a $25,000 loan costs $2,379.74 in interest over 3 years, $3,999.20 over 5 years, and $5,677.96 over 7 years — the monthly payment falls from $760.55 to $365.21, but the interest more than doubles. Watch for origination fees (often 1%–8% on personal loans), late charges, and prepayment penalties. To pay less, compare offers by APR, choose the shortest term your budget allows, and make extra principal payments when possible.
Frequently Asked Questions
What is amortization?
Amortization is the process of paying off a loan through regular payments over time. Each payment covers the interest accrued and reduces the principal balance.
What is the difference between APR and interest rate?
The interest rate is the annual percentage charged on your outstanding balance and determines the monthly payment. APR adds certain lender fees, such as origination charges, to the interest rate, giving you a fuller picture of the yearly cost. Compare loan offers by APR, but use the interest rate when calculating payments.
How much interest will I pay on a $25,000 loan?
It depends on the rate and term. At a 6% annual rate over 5 years, the monthly payment is $483.32 and total interest is $3,999.20. At a 10% rate over the same term, the payment rises to $531.18 and total interest reaches $6,870.57. Shortening the term to 3 years at 6% cuts the interest to $2,379.74.
Is a shorter or longer loan term better?
A shorter term means higher monthly payments but much less total interest, so it costs less overall if you can afford it. A longer term lowers the payment and eases monthly cash flow, but you pay more interest over the life of the loan. Choose the shortest term that fits comfortably in your budget.
Can I use this for variable-rate loans?
This calculator assumes a fixed interest rate. For variable-rate loans, your payment may change when the rate adjusts.
Does the start date affect the calculation?
The start date only affects the displayed payoff date. The payment amount itself depends on the loan amount, rate, and term.
How can I pay off my loan faster?
Making extra principal payments reduces your balance faster, saving interest and shortening the loan term. Even small extra payments can make a big difference over time.