Loan Calculator
Calculate loan payments and interest
Instructions
Enter Loan Amount
Input the loan amount - the principal amount you're borrowing.
Enter Interest Rate
Enter the annual interest rate as a percentage. This is the cost of borrowing money.
Enter Loan Term
Enter the loan term in years (e.g., 30 for a 30-year mortgage, 5 for a 5-year auto loan).
Review Results
See your monthly payment, total interest paid, and total amount paid over the life of the loan.
Formula
Monthly Payment = P × [r(1 + r)ⁿ] / [(1 + r)ⁿ - 1]
Where:
• P = Principal (Loan Amount)
• r = Monthly interest rate (Annual Rate ÷ 12)
• n = Number of monthly payments (Years × 12)
Example Calculation:
If loan amount $100,000, interest rate 5%, term 30 years:
• Monthly rate = 5% ÷ 12 = 0.4167%
• Number of payments = 30 × 12 = 360
• Monthly payment: ~$537
• Total interest: ~$93,256
• Total paid: ~$193,256
About Loan Calculator
A loan calculator helps you calculate monthly payments, total interest, and total amount paid for any loan. Whether you're planning to take out a mortgage, auto loan, personal loan, or any other type of loan, this calculator shows you the true cost of borrowing money. Understanding your loan payments and total interest helps you make informed decisions about borrowing and plan your finances accordingly.
When to Use This Calculator
- Loan Planning: Plan for loans before applying
- Payment Planning: Understand monthly payment requirements
- Budget Planning: Plan your budget around loan payments
- Loan Comparison: Compare different loan options
- Affordability: Determine how much you can afford to borrow
Understanding Loan Payments
- Amortization: Loans are typically amortized (fixed payment over term)
- Principal & Interest: Each payment includes principal and interest
- Early Payments: Early payments are mostly interest, later payments mostly principal
- Total Interest: Total interest depends on rate, term, and amount
Why Use Our Calculator?
- Quick Calculation: Instantly see monthly payment and total cost
- Accurate Formula: Uses standard loan amortization formula
- Payment Planning: Plan your budget around loan payments
- Interest Analysis: Understand total interest costs
- 100% Free: No registration or payment required
Tips for Better Loan Terms
- Higher Down Payment: Reduces loan amount and interest paid
- Shorter Loan Term: Higher monthly payments but less total interest
- Better Credit Score: Qualifies you for lower interest rates
- Shop Around: Compare rates from multiple lenders
- Consider Points: Paying points may lower your rate
Common Questions
How is the monthly payment calculated?
The monthly payment is calculated using the standard loan amortization formula: Monthly Payment = P × [r(1 + r)ⁿ] / [(1 + r)ⁿ - 1], where P is the principal, r is the monthly interest rate, and n is the number of payments. This ensures the loan is paid off in full by the end of the term.
Why is total interest so high on long-term loans?
Total interest is high on long-term loans because you're paying interest on the outstanding balance for many years. Early in the loan, most of your payment goes toward interest. As you pay down principal, less goes toward interest, but over 30 years, interest accumulates significantly.
How can I reduce total interest paid?
To reduce total interest: (1) Choose a shorter loan term if you can afford higher payments, (2) Make extra principal payments, (3) Get a lower interest rate (improve credit, shop around), (4) Make a larger down payment to reduce loan amount.
Does this calculator work for all loan types?
Yes, this calculator works for any fixed-rate, amortized loan including mortgages, auto loans, personal loans, student loans, and more. It doesn't work for interest-only loans, adjustable-rate loans (unless you enter the current rate), or loans with balloon payments.
Calculate Your Loan Payments
The Loan Calculator computes your monthly payment, total interest paid, and complete amortization schedule for any loan amount, interest rate, and term. It works for personal loans, auto loans, student loans, and any fixed-rate installment loan.
Understanding your loan payments before borrowing is crucial for responsible financial planning. This calculator shows you exactly how much you will pay each month and over the life of the loan, breaking down each payment into principal and interest components.
The detailed amortization table shows how your balance decreases with each payment and how the proportion of principal versus interest shifts over the loan term. You can also model the impact of extra payments to see how much interest you could save.
Frequently Asked Questions
How does interest rate affect monthly payments?
Even a 1% difference in interest rate can significantly impact your payments. For a 200,000 dollar loan over 30 years, 1% higher rate adds roughly 120 dollars per month.
Should I choose a shorter loan term?
Shorter terms have higher monthly payments but save significantly on total interest. A 15-year mortgage costs about 40% less in total interest than a 30-year mortgage.