Money
Loan Calculator
Enter the loan amount, APR, and term, then optionally add an extra monthly payment. The calculator estimates your monthly payment, total interest, payoff time, and the savings from paying extra each month.
The principal you are borrowing. · e.g. 10,000
Annual percentage rate on the loan. · e.g. 8
e.g. 5
Pay more than the scheduled payment to see time and interest saved. · e.g. 0
Estimated monthly payment
$202.76
Over 5 years at 8% APR
Examples
$10,000 at 8% APR for 5 years
≈ $202.76/mo · $2,165.84 interest
Same loan + $50/mo extra payment
≈ 47 mo payoff · saves $518 interest
$20,000 at 6% APR for 4 years
≈ $469.70/mo · $2,545.63 interest
How it works
The calculator uses the standard amortized loan payment formula. Each month, interest accrues on the remaining balance at APR ÷ 12, and your payment covers that interest plus a small slice of principal. Over the term, the principal balance is paid down to zero.
Monthly loan payment
M = P × r × (1 + r)^n / ((1 + r)^n − 1)
The parts
- M = monthly payment
- P = loan amount (principal)
- r = monthly interest rate (APR ÷ 12 ÷ 100)
- n = number of monthly payments
At 0% APR
M = P / n
What is a loan calculator?
A loan calculator estimates the monthly payment and total interest on an amortized loan from three inputs: the amount you borrow, the APR, and the loan term. It is useful for personal loans, auto loans, student loans, and any other fixed-rate loan that pays down to zero with equal monthly payments.
How the loan calculator works
Enter the loan amount, the APR, and the loan term (months or years). The calculator computes:
- The scheduled monthly payment from the amortization formula.
- Total of payments and total interest over the full term.
- The payoff time in years and months.
- If you add an extra monthly payment, a new payoff time, total interest, and the time and interest saved.
APR and loan term
APR is the annualized cost of borrowing. Loan term is how long you pay. A higher APR raises both the monthly payment and the total interest. A longer term lowers the monthly payment but raises total interest. The shortest term you can comfortably afford usually wins on total cost.
To compare two rate or term scenarios in percentage terms, try the percentage increase calculator.
Principal vs interest
Principal is the amount you actually borrowed. Interest is what the lender charges to lend it to you. Each payment is split between the two. Early in the loan, the balance is large, so most of the payment goes to interest. As the balance shrinks, more of each payment goes to principal. This is why extra payments early in the loan save more interest than the same payment late in the loan.
Extra monthly payments
Adding an extra amount to each monthly payment reduces the principal balance faster, which means less interest accrues each month. The calculator simulates the loan month by month with your scheduled payment plus the extra, and reports the new payoff time, total interest, and the time and interest saved compared to the base schedule.
Amortization explained
Amortization just means each payment is split between interest and principal so that the loan reaches zero on the last scheduled payment. The interest portion is calculated from the current balance and the monthly rate, and the rest of the payment goes to principal. The split shifts steadily from mostly interest to mostly principal across the term.
Worked example
Loan amount $10,000, APR 8%, term 5 years (60 months), no extra payment.
- Monthly payment ≈ $202.76
- Total of payments ≈ $12,165.84
- Total interest ≈ $2,165.84
- Payoff time = 5 years
Add an extra $50 per month on top of the scheduled payment:
- Payoff time with extra ≈ 47 months (about 3 years 11 months)
- Total interest with extra ≈ $1,647.65
- Months saved ≈ 13
- Interest saved ≈ $518.18
Common mistakes
- Confusing APR with the monthly interest rate. Monthly rate is APR divided by 12.
- Picking the longest term to lower the monthly payment without checking how much extra total interest you pay over the life of the loan.
- Forgetting that an extra payment only helps if it actually exceeds the interest that accrues that month. Tiny extra amounts on very high-rate balances barely move the payoff.
- Mixing the term unit. 60 months and 5 years are the same; 60 years would never be the intent. Use the unit toggle to stay clear.
- Treating this loan estimate as a final offer. Lenders also consider fees, credit profile, and loan type.
Related tools
- Car payment calculator for auto loans with sales tax, trade in, and down payment.
- Credit card payoff calculator for revolving balances with variable payments.
- Roth IRA calculator for projecting a long-term savings balance.
- Percentage increase calculator for comparing rates and prices.
Disclaimer. This calculator is an estimate for general educational use. Actual loan terms, rates, fees, payoff rules, and payment schedules can vary by lender, credit profile, and loan type. The calculator is not a loan offer or approval and is not financial advice.
Frequently asked questions
Use the standard amortized loan payment formula: monthly payment = P × r × (1 + r)^n / ((1 + r)^n − 1). P is the loan principal, r is the monthly interest rate (APR ÷ 12 ÷ 100), and n is the number of monthly payments. If APR is 0%, the payment simplifies to P / n.
It is the amortization formula above. Each payment covers a portion of interest and a portion of principal. Early payments are mostly interest because the balance is largest, and later payments are mostly principal because the balance is small. The total of all payments is the principal plus the interest you pay over the life of the loan.
APR is the annualized cost of the loan, expressed as a percentage. A higher APR raises both the monthly payment and the total interest paid. Even a one percentage point change in APR can move the monthly payment by several dollars on a typical loan, and hundreds or thousands of dollars in total interest over a multi-year term.
A longer term lowers the monthly payment because the balance is spread over more months, but it raises total interest because the balance is outstanding for longer. A shorter term raises the monthly payment but lowers total interest. The right choice depends on what monthly payment you can comfortably afford.
Amortization is the process of paying down a loan with equal periodic payments that each include interest and principal. The interest portion shrinks each month as the balance shrinks, and the principal portion grows. An amortization schedule shows this split for every payment over the life of the loan.
Every dollar of extra payment goes directly toward the principal, which lowers the balance that future interest is calculated on. Even a small extra payment can shave months off the loan and save real money in interest. The Extra monthly payment field shows the new payoff time, interest saved, and months saved.
The math is the same. A mortgage is an amortized loan, so a generic loan calculator like this one estimates the principal and interest portion of a mortgage payment. Real mortgages also include property tax, homeowners insurance, and sometimes mortgage insurance, which a dedicated mortgage calculator would add on top.
Yes. Most personal loans are fixed-rate, fixed-term, fully amortizing loans, which is exactly what this calculator models. Enter the loan amount, APR, and term to estimate the monthly payment, total interest, and payoff time.
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