Estimate the monthly payment, total interest, and full cost of any fixed-rate loan. Adjust the inputs and results update instantly.
How a Loan Calculator Works
A loan calculator turns three numbers — how much you borrow, your interest rate, and how long you take to repay — into a single monthly payment. It uses the standard amortizing-loan formula, where every payment covers the interest accrued that month first, then chips away at the principal balance.
The Monthly Payment Formula
Monthly payment is calculated as M = P × r ÷ (1 − (1 + r)−n), where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments (years × 12). Early payments are mostly interest; later payments are mostly principal.
What Drives Your Total Cost
The interest rate and term both matter, but in different ways. A higher rate raises every payment. A longer term lowers your monthly payment but increases total interest — sometimes dramatically. Stretching a $25,000 loan from 5 years to 7 years cuts the payment but can add thousands in interest.
Tip: Always compare loans on total interest paid, not just the monthly payment. The lowest monthly payment is often the most expensive loan over its full life.
Shortening Your Loan
Even small extra payments toward principal shorten the term and reduce total interest, because you stop paying interest on the money you've repaid early. If your loan has no prepayment penalty, rounding your payment up is one of the simplest ways to save.
Frequently Asked Questions
What is a loan calculator?
A loan calculator estimates your monthly payment and total interest based on the amount borrowed, the interest rate, and the repayment term. It uses standard amortization math, the same approach lenders use to set fixed payments.
Does this work for any type of loan?
Yes. The math is the same for personal loans, auto loans, mortgages, and most installment loans with a fixed rate and fixed term. For loans with fees, use our APR calculator to see the true cost; for revolving debt like credit cards, use the debt payoff calculator.
How does the interest rate affect my payment?
A higher annual rate increases both your monthly payment and your total interest. Because interest compounds on the remaining balance, even a one-point difference in rate can add up to a significant amount over a multi-year loan.
Should I choose a longer or shorter term?
A longer term lowers your monthly payment but raises total interest paid. A shorter term costs more each month but saves money overall. Choose the shortest term whose payment still fits comfortably in your budget.
How can I lower the total cost of my loan?
Get the lowest rate you qualify for, choose the shortest affordable term, and make extra principal payments when possible. Avoiding origination fees and prepayment penalties also reduces the real cost.