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Loan Calculator — Calculate Monthly Payments, Interest & Total Cost

Enter loan amount, interest rate, and term — see your monthly payment, total interest, and total cost instantly. Uses the standard amortization formula that banks use. No signup, no ads, runs in your browser.

Loan Principal
The loan calculator helps you calculate monthly payments, total interest, and total loan cost.

The loan calculator helps you calculate monthly payments, total interest, and total loan cost.

How Loan Payments Are Calculated

The monthly payment formula is: M = P × [r(1+r)^n] / [(1+r)^n - 1], where P is principal, r is monthly interest rate (annual ÷ 12), and n is total number of payments (years × 12).

What this means in practice: on a $30,000 car loan at 6.5% for 5 years, your monthly payment is $587. You'll pay $5,218 in total interest — about 17% on top of the principal. That's the cost of borrowing.

The key insight most people miss: in the early months, most of your payment goes to interest, not principal. On that same $30K loan, your first payment splits roughly $162 to interest and $425 to principal. By the last year, it flips: $3 to interest and $584 to principal. This is why extra payments early in the loan save dramatically more interest than extra payments later.

This calculator assumes fixed-rate, fully amortizing loans (equal monthly payments for the entire term). It doesn't account for variable rates, balloon payments, interest-only periods, or fees. For mortgages with PMI, taxes, and insurance, use our dedicated mortgage calculator.

How to Use

  1. Enter the loan amount (principal) — what you're borrowing, not the purchase price.
  2. Enter the annual interest rate (APR) as a percentage.
  3. Enter the loan term in years.
  4. See monthly payment, total interest, and total cost instantly.

When You'll Use This

Comparing car loan offers from different dealers

Dealer A offers $30K at 5.9% for 60 months, Dealer B offers $30K at 4.9% for 72 months. Which costs less total? Plug both in — the lower rate with longer term might actually cost more in total interest ($4,700 vs $4,600 in this case). Monthly payment isn't everything.

Deciding between a shorter or longer loan term

A 3-year personal loan at 8% means $940/month on $30K but only $3,860 total interest. A 5-year term drops to $608/month but costs $6,497 in interest. Is the $332/month savings worth $2,637 more in interest? This calculator makes the tradeoff visible.

Figuring out how much you can afford to borrow

You can afford $500/month. At 7% for 5 years, that means you can borrow about $25,000. At 7% for 3 years, only about $16,500. Work backwards from your budget to find your borrowing limit.

Calculating the impact of a rate difference

Your credit score qualifies you for 6% vs 8%. On a $20K loan for 4 years, that's the difference between $2,540 and $3,420 in total interest — $880 saved just from a better rate. Worth improving your credit score before applying.

Things to Know

1.

APR vs interest rate — they're not the same

The interest rate is just the cost of borrowing. APR (Annual Percentage Rate) includes fees, origination charges, and other costs rolled into an equivalent rate. A loan at 5% interest with $1,000 in fees might have a 5.8% APR. Always compare APR to APR, not rate to APR.

2.

Longer terms = lower payments but way more interest

A $25K loan at 6%: 3-year term = $760/month, $2,370 interest. 5-year term = $483/month, $3,999 interest. 7-year term = $365/month, $5,659 interest. You pay $3,289 more for the "convenience" of lower monthly payments. Always pick the shortest term you can afford.

3.

Extra payments save more than you think

Adding $100/month to a $30K, 5-year, 6.5% loan saves $850 in interest and pays it off 9 months early. The earlier you make extra payments, the more you save — because you're reducing the principal that interest is calculated on.

4.

This calculator shows principal + interest only

Real loan costs may include origination fees (1-5% of loan), late payment fees, prepayment penalties, and for auto loans: gap insurance. For mortgages: property tax, homeowner's insurance, PMI. Factor these in separately.

Examples

$25,000 auto loan at 6.5% for 5 years

A typical new car loan scenario.

Input

Principal: $25,000 | Rate: 6.5% | Term: 5 years

Output

Monthly: $489 | Total Interest: $4,352 | Total Cost: $29,352

$10,000 personal loan at 9% for 3 years

A common personal loan for debt consolidation.

Input

Principal: $10,000 | Rate: 9% | Term: 3 years

Output

Monthly: $318 | Total Interest: $1,448 | Total Cost: $11,448

Features

  • Standard amortization formula — same math banks use
  • Shows monthly payment, total interest, and total cost
  • Works for any fixed-rate loan (auto, personal, student)
  • Instant results as you type — no submit button needed
  • No signup, no personal information collected
  • Runs 100% in your browser — your financial data stays private

Frequently Asked Questions

How is the monthly payment calculated?

Using the standard amortization formula: M = P × [r(1+r)^n] / [(1+r)^n - 1]. P = principal, r = monthly rate (annual rate ÷ 12 ÷ 100), n = total payments (years × 12). This gives equal monthly payments where each payment covers that month's interest plus some principal.

Why do I pay so much more than I borrowed?

Because interest compounds monthly. On a $30K loan at 7% for 5 years, you pay $5,618 in interest — that's 19% extra. The longer the term, the worse it gets: same loan for 7 years costs $8,014 in interest (27% extra). Interest is the price of time.

Should I choose a shorter or longer loan term?

Shortest term you can comfortably afford. A shorter term means higher monthly payments but dramatically less total interest. Rule of thumb: if the monthly payment difference between 3-year and 5-year is less than 20% of your discretionary income, take the 3-year.

Does this work for variable-rate loans?

Only as a snapshot. This calculator assumes a fixed rate for the entire term. For variable-rate loans, it shows what you'd pay if the current rate stayed constant. In reality, your payments will change when the rate adjusts — typically annually or after an initial fixed period.

How do extra payments affect my loan?

Extra payments go directly to principal, reducing the balance that interest is calculated on. Even $50-100/month extra can save thousands in interest and shorten your loan by months or years. The impact is largest early in the loan when the balance is highest. Use our amortization calculator to see the exact impact.

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