A loan calculator turns the amount, rate and term of a fixed-rate loan into a monthly payment, and the amortization schedule shows how each payment splits between interest and principal. The payment is P × r × (1 + r)n ÷ ((1 + r)n − 1). For example, $25,000 at 6.5% for 60 months costs $489.15 a month.
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How to use the loan calculator
- Enter the amount you will borrow, after any down payment.
- Enter the annual interest rate. For an unsecured personal loan, use the rate your lender offers.
- Enter the term in months (5 years = 60).
- Read the monthly payment, then scroll the schedule for the interest and principal in each month and the balance left.
Use it for personal loans, car loans, student loans or any installment loan with a fixed rate.
What is the loan payment formula?
- P = amount borrowed
- r = annual rate ÷ 100 ÷ 12
- n = number of monthly payments
Payment = P × r × (1 + r)n ÷ ((1 + r)n − 1). If the rate is 0%, the payment is simply P ÷ n.
How to read the amortization schedule
Each row of the schedule shows one payment:
- Interest = balance at the start of the month × r
- Principal = payment − interest
- New balance = old balance − principal
Early rows are interest-heavy. As the balance falls, more of the same payment goes to principal, and the final row brings the balance to zero.
Worked example: $15,000 personal loan at 11%
| Term | Monthly payment | Total interest | Total paid |
|---|---|---|---|
| 24 months | $699.12 | $1,779 | $16,779 |
| 36 months | $491.08 | $2,679 | $17,679 |
| 48 months | $387.68 | $3,609 | $18,609 |
| 60 months | $326.14 | $4,568 | $19,568 |
Stretching from 36 to 60 months cuts the payment by about $165 but adds about $1,889 in interest.
Monthly payment by loan amount
| Loan amount | 8%, 36 months | 8%, 60 months | 12%, 36 months | 12%, 60 months |
|---|---|---|---|---|
| $5,000 | $156.68 | $101.38 | $166.07 | $111.22 |
| $10,000 | $313.36 | $202.76 | $332.14 | $222.44 |
| $20,000 | $626.73 | $405.53 | $664.29 | $444.89 |
| $30,000 | $940.09 | $608.29 | $996.43 | $667.33 |
| $50,000 | $1,566.82 | $1,013.82 | $1,660.72 | $1,112.22 |
How much can I borrow for a given payment?
Reverse the formula: loan amount = payment × (1 − (1 + r)−n) ÷ r. If you can afford $400 a month at 8% for 60 months, r = 0.0066667 and n = 60, so you can borrow about $19,727.
Rate vs APR
The rate in the formula is the interest rate. The APR also includes certain finance charges such as origination fees, so it is the better number for comparing offers. If a lender deducts a fee from the money you receive, use the APR calculator to see the real cost.
When this calculator is the wrong tool
- Mortgages with taxes and insurance: use the mortgage calculator.
- Credit cards and other revolving debt: see the credit card payoff calculator.
- Interest-only or balloon loans: the payment formula above does not apply.
- Indian-style EMI quotes: the same math, explained in rupees on the EMI calculator.
Total cost by term
On $20,000 at 9%, a longer term lowers the payment but raises the total cost:
| Term | Monthly payment | Total interest | Total paid |
|---|---|---|---|
| 24 months | $913.69 | $1,929 | $21,929 |
| 36 months | $635.99 | $2,896 | $22,896 |
| 48 months | $497.70 | $3,890 | $23,890 |
| 60 months | $415.17 | $4,910 | $24,910 |
| 72 months | $360.51 | $5,957 | $25,957 |
| 84 months | $321.78 | $7,030 | $27,030 |
The CFPB notes that with amortization, early payments go mostly to interest, so paying extra early cuts the most interest.
Estimates for education only, not financial advice. Your lender’s figures are final.
Comparing two loan offers
Lenders often quote a lower rate on a longer term, and the monthly figure alone can mislead you. A loan calculator shows both the payment and the total interest, which is what you need here. Put both offers through the loan calculator before you sign. Take $15,000 offered two ways: 9.5% for 36 months, or 8.9% for 60 months.
- 36 months at 9.5%: $480.49 a month, $2,297.79 in total interest.
- 60 months at 8.9%: $310.65 a month, $3,638.87 in total interest.
The longer loan has the lower rate and a payment about $170 smaller, yet it costs roughly $1,340 more over its life because interest runs for two extra years. If the shorter payment fits your budget with room to spare, the loan calculator confirms it is the cheaper choice. If it would leave you short every month, the longer term buys flexibility, and you can still prepay when the lender allows it without a penalty.
Run the loan calculator a second time with any origination fee included. A 5% fee deducted from a $15,000 loan leaves you $14,250 in hand while you repay the full $15,000, which raises the true cost well above the quoted rate. Compare the loan calculator figures with the APR on the disclosure, which is usually higher than the note rate and is the fairer number for comparing lenders.
Related converters and calculators
Related tools:
- Amortization calculator: yearly summaries
- Auto loan calculator: down payment and trade-in
- APR calculator: fees and true cost
- EMI calculator: loans in rupees
- Simple interest calculator: non-amortizing loans
Publishers and lenders can put this loan calculator on their own site: it ships with the ready-made calculators for WordPress that power Calcenzo.
For unsecured borrowing, try the personal loan calculator.
Sources
CFPB: What is amortization?; CFPB: Interest rate vs APR.
Questions about this calculator
How do I calculate a monthly loan payment?
Convert the annual rate to a monthly rate (rate ÷ 12 ÷ 100), then use Payment = P × r × (1 + r)^n / ((1 + r)^n − 1), where n is the number of months.
What is a loan amortization schedule?
A month-by-month table showing how much of each payment goes to interest, how much to principal and the balance left after each payment.
What is the payment on a $25,000 loan?
At 6.5% for 60 months it is about $489.15 a month. At 11% for 60 months it is about $543.56.
Can I pay off a loan early?
Usually yes. Check the agreement for a prepayment penalty, and ask the lender to apply extra money to principal.
Should I compare loans by rate or APR?
By APR, because it includes certain fees as well as interest.
Check the assumptions and units before relying on a result. Financial, tax and health estimates do not replace advice for your individual circumstances.
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