Loan Calculator
Estimate the monthly payment on an amortized loan, plus the total you will pay and the total interest, from the loan amount, interest rate, and term.
- Monthly rate = 6% / 12 = 0.5% and 60 payments.
- Monthly payment = P·i·(1+i)ⁿ / ((1+i)ⁿ − 1) = $386.66.
- Total paid = $386.66 × 60 = $23,199.36; total interest = $3,199.36.
Embed Loan Calculator
Copy this iframe code into a page that permits embeds.
All calculations run locally in your browser. Your entered values are not sent to an external service.
How to Use the Loan Calculator
Enter the loan amount, the annual interest rate as a percent, and the term in years, then select Calculate Payment. The tool estimates the fixed monthly payment along with the total paid and total interest over the life of the loan.
- Enter the amount you plan to borrow.
- Enter the annual interest rate. Use 0 for an interest-free plan.
- Enter the term in years and select Calculate Payment.
This estimate assumes a fixed rate and equal monthly payments. Real loans may include fees, insurance, taxes, or a different compounding method, so a lender’s quote can differ.
The Monthly Payment Formula
P is the loan amount, i is the monthly interest rate (the annual rate divided by 12), and n is the total number of monthly payments (years times 12). The formula spreads the loan into equal payments so the balance reaches zero at the end of the term.
When the interest rate is zero, the formula reduces to the amount divided by the number of payments, because no interest accrues. Each payment then reduces only the principal.
Loan Calculator Examples
A five-year car loan
Borrowing $20,000 at 6% for 5 years gives 60 payments of about $386.66. The total paid is about $23,199.36, of which about $3,199.36 is interest.
A short personal loan
Borrowing $10,000 at 11% for 3 years gives 36 payments of about $327.39, with roughly $1,786 in interest.
Interest-free financing
A $5,000 purchase at 0% over 2 years is simply $5,000 divided by 24, or about $208.33 per month, with no interest.
How Interest and Amortization Work
Each monthly payment is split between interest and principal. Early in the loan, more of the payment goes toward interest because the balance is high. As the balance falls, a larger share goes toward principal. This gradual shift is called amortization.
A longer term lowers the monthly payment but increases the total interest, since interest is charged for more months. A shorter term raises the payment but reduces the total cost. Comparing the total interest across terms shows the true trade-off.
Common Loan Mistakes
Entering the monthly rate as the annual rate
Enter the annual rate. The calculator divides by 12 to get the monthly rate.
Comparing payments without comparing total interest
A lower monthly payment can cost far more overall if the term is longer.
Ignoring fees and insurance
This estimate covers principal and interest only. Real loans may add other costs.
Assuming the rate is fixed when it is variable
Variable-rate loans can change over time, so the payment may not stay constant.
Rounding the term incorrectly
The term is converted to whole months. Enter fractional years carefully.
Loan Calculator FAQs
How is a monthly loan payment calculated?
Using the amortization formula M = P·i·(1+i)ⁿ / ((1+i)ⁿ − 1), where i is the monthly rate and n is the number of payments.
What is total interest?
It is the total amount paid minus the original loan amount.
Does a longer term cost more?
Usually yes. It lowers the monthly payment but increases the total interest paid.
Can I enter a 0% rate?
Yes. With 0% the payment is simply the amount divided by the number of months.
Does this include taxes, fees, or insurance?
No. It estimates principal and interest only. Actual costs may be higher.
Are my numbers sent to a server?
No. The calculation runs locally in your browser.
Related Calculators
Explore More Finance Tools
Continue with loan, interest, and budgeting tools in the SolverCalc collection.
Reviewed by Prof. Dr. Khalil Mudassar (PhD) · Last updated: [mc_modified_date]
Sources
Disclaimer
This calculator is for general educational use and provides estimates only. It is not financial or lending advice. Confirm the exact terms, rate, and costs with your lender before making decisions.