Estimate monthly payments, total interest, payoff date, and an annual amortization summary.
| Year | Beginning balance | Principal paid | Interest paid | Ending balance |
|---|
How to use the loan calculator
Enter the loan amount, the annual interest rate, the loan term in years, and the date the loan starts. Press Calculate loan to see your monthly payment, the total interest you will pay, the total cost of the loan, your payoff date, and a year-by-year amortization table showing how each year’s payments are split between principal and interest.
It works for most fixed-rate installment loans, such as car loans, personal loans, and student loans.
How the monthly payment is calculated
Fixed-rate loans use the standard amortization formula:
- Payment = P × r ÷ (1 − (1 + r)^(−n))
where P is the amount borrowed, r is the monthly interest rate (the annual rate ÷ 12), and n is the total number of monthly payments.
Example
You borrow $20,000 at 7% for 5 years (60 payments). Your monthly payment is $396.02. Over the life of the loan you pay $3,761.44 in interest, for a total of $23,761.44.
If you choose a 3-year term instead, the payment rises to $617.54 a month, but the total interest drops to $2,231.51. You would save over $1,500 by paying it off two years sooner.
Understanding amortization
Each monthly payment stays the same, but what it pays for changes over time. Early on, most of the payment goes toward interest, because interest is charged on a large balance. As the balance shrinks, more and more of each payment goes toward the principal. The amortization table makes this easy to see.
Ways to pay less interest
- Choose a shorter term if you can afford the higher payment.
- Make extra payments toward principal. Even small extra amounts shorten the loan and reduce total interest. Check first that your lender doesn’t charge a prepayment penalty.
- Compare rates. A one-point difference in the rate can change the total cost by hundreds or thousands of dollars. Try a few rates in the calculator to see.
- Look at the APR, not just the rate. The APR includes certain fees, so it gives a better picture of the true cost of borrowing.
Common questions
Why is my lender’s number slightly different?
Lenders may add fees, insurance, or use slightly different rounding and day-count rules. This calculator shows the standard principal-and-interest payment as an estimate.
Does this work for credit cards?
Not really. Credit cards don’t have a fixed term or a fixed payment, so they work differently from installment loans.
This tool is for education and planning only and is not financial advice. See our Financial Disclaimer.
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