Loan Calculator
Estimate your monthly payment, total interest, and total cost for any loan amount, rate, and term.
Monthly Payment
$483.32
Example
On a $25,000.00 loan at 6% annual interest over 5 years, the monthly payment is $483.32. Over the life of the loan you pay $28,999.20 in total — $3,999.20 of that is interest (13.8% of total payments).
Loan Amount
$25,000.00
Total Interest
$3,999.20
Total Cost
$28,999.20
Loan summary
Principal
$25,000.00
Rate
6%
Term
5 yrs
Payoff Date
Jul 2031
Total of Payments
$28,999.20
Total Interest
$3,999.20
Total cost of loan, split between principal and interest
- Principal: $25,000.00
- Total Interest: $3,999.20
What is a Loan Calculator?
A loan calculator helps you estimate how much you will pay each month when you borrow a lump sum and repay it in equal monthly installments over a fixed term. The three core inputs — principal (amount borrowed), annual interest rate, and repayment term — fully determine your monthly payment using the standard amortization formula.
One of the most useful things a loan calculator reveals is the total interest paid over the life of the loan. For long terms or high rates this can equal or even exceed the original principal. Seeing that number upfront lets you decide whether a shorter term, a larger down payment, or a lower rate is worth pursuing before you sign.
Remaining balance and cumulative interest over time
Amortization Schedule
| Month | Payment | Principal | Interest | Balance |
|---|---|---|---|---|
| 1 | $483.32 | $358.32 | $125.00 | $24,641.68 |
| 2 | $483.32 | $360.11 | $123.21 | $24,281.57 |
| 3 | $483.32 | $361.91 | $121.41 | $23,919.66 |
| 4 | $483.32 | $363.72 | $119.60 | $23,555.93 |
| 5 | $483.32 | $365.54 | $117.78 | $23,190.39 |
| 6 | $483.32 | $367.37 | $115.95 | $22,823.03 |
| 7 | $483.32 | $369.20 | $114.12 | $22,453.82 |
| 8 | $483.32 | $371.05 | $112.27 | $22,082.77 |
| 9 | $483.32 | $372.91 | $110.41 | $21,709.86 |
| 10 | $483.32 | $374.77 | $108.55 | $21,335.09 |
| 11 | $483.32 | $376.64 | $106.68 | $20,958.45 |
| 12 | $483.32 | $378.53 | $104.79 | $20,579.92 |
| 13 | $483.32 | $380.42 | $102.90 | $20,199.50 |
| 14 | $483.32 | $382.32 | $101.00 | $19,817.18 |
| 15 | $483.32 | $384.23 | $99.09 | $19,432.94 |
| 16 | $483.32 | $386.16 | $97.16 | $19,046.79 |
| 17 | $483.32 | $388.09 | $95.23 | $18,658.70 |
| 18 | $483.32 | $390.03 | $93.29 | $18,268.68 |
| 19 | $483.32 | $391.98 | $91.34 | $17,876.70 |
| 20 | $483.32 | $393.94 | $89.38 | $17,482.76 |
| 21 | $483.32 | $395.91 | $87.41 | $17,086.86 |
| 22 | $483.32 | $397.89 | $85.43 | $16,688.97 |
| 23 | $483.32 | $399.88 | $83.44 | $16,289.10 |
| 24 | $483.32 | $401.87 | $81.45 | $15,887.22 |
| 25 | $483.32 | $403.88 | $79.44 | $15,483.34 |
| 26 | $483.32 | $405.90 | $77.42 | $15,077.43 |
| 27 | $483.32 | $407.93 | $75.39 | $14,669.50 |
| 28 | $483.32 | $409.97 | $73.35 | $14,259.53 |
| 29 | $483.32 | $412.02 | $71.30 | $13,847.51 |
| 30 | $483.32 | $414.08 | $69.24 | $13,433.42 |
| 31 | $483.32 | $416.15 | $67.17 | $13,017.27 |
| 32 | $483.32 | $418.23 | $65.09 | $12,599.04 |
| 33 | $483.32 | $420.32 | $63.00 | $12,178.71 |
| 34 | $483.32 | $422.43 | $60.89 | $11,756.29 |
| 35 | $483.32 | $424.54 | $58.78 | $11,331.75 |
| 36 | $483.32 | $426.66 | $56.66 | $10,905.09 |
| 37 | $483.32 | $428.79 | $54.53 | $10,476.29 |
| 38 | $483.32 | $430.94 | $52.38 | $10,045.35 |
| 39 | $483.32 | $433.09 | $50.23 | $9,612.26 |
| 40 | $483.32 | $435.26 | $48.06 | $9,177.00 |
| 41 | $483.32 | $437.44 | $45.89 | $8,739.57 |
| 42 | $483.32 | $439.62 | $43.70 | $8,299.94 |
| 43 | $483.32 | $441.82 | $41.50 | $7,858.12 |
| 44 | $483.32 | $444.03 | $39.29 | $7,414.09 |
| 45 | $483.32 | $446.25 | $37.07 | $6,967.84 |
| 46 | $483.32 | $448.48 | $34.84 | $6,519.36 |
| 47 | $483.32 | $450.72 | $32.60 | $6,068.64 |
| 48 | $483.32 | $452.98 | $30.34 | $5,615.66 |
| 49 | $483.32 | $455.24 | $28.08 | $5,160.42 |
| 50 | $483.32 | $457.52 | $25.80 | $4,702.90 |
| 51 | $483.32 | $459.81 | $23.51 | $4,243.10 |
| 52 | $483.32 | $462.10 | $21.22 | $3,780.99 |
| 53 | $483.32 | $464.42 | $18.90 | $3,316.58 |
| 54 | $483.32 | $466.74 | $16.58 | $2,849.84 |
| 55 | $483.32 | $469.07 | $14.25 | $2,380.77 |
| 56 | $483.32 | $471.42 | $11.90 | $1,909.35 |
| 57 | $483.32 | $473.77 | $9.55 | $1,435.58 |
| 58 | $483.32 | $476.14 | $7.18 | $959.44 |
| 59 | $483.32 | $478.52 | $4.80 | $480.92 |
| 60 | $483.32 | $480.92 | $2.40 | $0.00 |
| Year | End Date | Principal Paid | Interest Paid | Balance |
|---|---|---|---|---|
| 1 | Jul 2027 | $4,420.08 | $1,379.76 | $20,579.92 |
| 2 | Jul 2028 | $4,692.70 | $1,107.14 | $15,887.22 |
| 3 | Jul 2029 | $4,982.14 | $817.70 | $10,905.09 |
| 4 | Jul 2030 | $5,289.42 | $510.42 | $5,615.66 |
| 5 | Jul 2031 | $5,615.66 | $184.18 | $0.00 |
Term Comparison for $25,000.00 at 6%
Every row below is computed specifically for this loan amount and interest rate. Compare how the monthly payment and total interest change as the term changes.
| Term | Monthly Payment | Total Interest | Total Cost |
|---|---|---|---|
| 1 yr | $2,151.66 | $819.93 | $25,819.93 |
| 2 yrs | $1,108.02 | $1,592.37 | $26,592.37 |
| 3 yrs | $760.55 | $2,379.74 | $27,379.74 |
| 4 yrs | $587.13 | $3,182.03 | $28,182.03 |
| 5 yrs (current) | $483.32 | $3,999.20 | $28,999.20 |
| 6 yrs | $414.32 | $4,831.20 | $29,831.20 |
| 7 yrs | $365.21 | $5,677.96 | $30,677.96 |
| 10 yrs | $277.55 | $8,306.15 | $33,306.15 |
| 15 yrs | $210.96 | $12,973.56 | $37,973.56 |
| 20 yrs | $179.11 | $17,985.86 | $42,985.86 |
How Is a Loan Payment Calculated?
The standard monthly installment formula — often called the amortization formula — computes a fixed payment that covers interest accrued during the period plus a portion of the principal, so that the balance reaches exactly zero on the last payment date.
- M — monthly payment
- P — principal (loan amount)
- r — monthly interest rate (annual rate ÷ 12)
- n — total number of monthly payments (years × 12)
When the interest rate is zero the formula reduces to P ÷ n — you simply split the principal evenly across all payments with no interest cost at all.
How Amortization Works Month by Month
Despite every monthly payment being the same dollar amount, the split between interest and principal shifts dramatically over the life of the loan. In the early months, most of each payment goes toward interest because the outstanding balance is still large. As the balance shrinks, a growing share of each payment reduces the principal. By the final few payments, almost the entire payment is pure principal.
This front-loading of interest is why making even one extra payment early in the loan saves a disproportionate amount of total interest: every dollar that reduces the principal in month 1 eliminates years of compounding interest charges behind it. A $500 extra payment in month one on a $25,000 five-year loan at 6% saves significantly more than the same extra payment in year four.
The Real Cost of a Longer Loan Term
Stretching a loan from 3 years to 5 years lowers the monthly payment noticeably, but the total interest paid roughly doubles. Stretching to 7 years lowers the payment further, but total interest triples. The table above shows this trade-off for your exact loan amount and rate. A common mistake is focusing only on whether you can afford the monthly payment rather than on the full cost over the loan's life.
In general, choose the shortest term whose monthly payment comfortably fits your cash flow after other fixed expenses. If two terms are similarly comfortable, the shorter one is almost always the better financial decision because of the compounding interest savings.
How Interest Rate Affects Total Cost
On a $25,000 loan over five years, the difference between a 5% and an 8% annual rate is about $1,900 in total interest — a difference that is easy to underestimate when you only compare monthly payments (which differ by only about $32/month). On larger loans or longer terms, the difference is even more dramatic. A 1% lower rate on a $100,000 ten-year loan saves roughly $5,500 in total interest.
Before taking a loan, it is almost always worth getting quotes from at least three lenders and checking whether paying "points" (prepaid interest) to lower the rate makes sense given how long you plan to hold the loan. The break-even on paying points is usually 18–24 months of lower payments.
Example — Your Current Inputs
On a $25,000.00 loan at 6% annual interest over 5 years, the monthly payment is $483.32. Over the life of the loan you pay $28,999.20 in total — $3,999.20 of that is interest (13.8% of total payments).
That means for every dollar you borrow, you pay approximately 1.16 cents back in total (principal + interest).
Additional Example — A Car Purchase
Imagine you finance a $20,000 used car at 7% annual interest over 4 years (48 months). The monthly payment works out to approximately $478.92. By the time you make the last payment, you have paid $22,987.86 in total — so $2,987.86 went to interest. That is 14.9% of the original loan amount, paid purely for the privilege of spreading the payments over four years rather than buying the car outright.
If you had instead stretched the same $20,000 loan to 6 years at the same rate, the monthly payment would drop to $343.33 — but your total interest cost would rise to $4,719.84, nearly 60% more interest for the same principal. This is why auto dealers often emphasize the monthly payment rather than the total cost when pitching longer loan terms.
About These Parameters
- Loan Amount
- The principal — the total amount you borrow. This is the starting balance on which interest is charged. It does not include any origination fees or points unless you roll those into the loan. Larger principals produce proportionally larger payments at the same rate and term, though the total-interest-to-principal ratio stays the same.
- Annual Interest Rate
- The yearly interest rate quoted by the lender. The calculator divides this by 12 to get a monthly rate for the amortization formula. Note that the Annual Percentage Rate (APR) you see in loan disclosures is slightly higher than the interest rate because it also includes fees and other finance charges spread over the loan term. For comparison purposes, use the APR when comparing offers from different lenders.
- Loan Term
- The repayment period in years (and optionally months). Personal loans typically run 1–7 years; auto loans 2–7 years; student loans 10–25 years. Longer terms lower the monthly payment but increase the total interest cost significantly. There is no single "right" term — the best choice balances monthly affordability against minimizing lifetime interest cost.
- Start Date
- The date of your first payment. This is used only to compute the projected payoff date and to label the amortization schedule. It does not affect the monthly payment amount or total interest calculation.
Frequently Asked Questions
Does paying extra each month save a lot of interest?
Yes — significantly more than the extra payments' face value, because every extra dollar of principal paid now eliminates future interest charges on that dollar for all remaining months of the loan. On a 5-year 7% loan, a single $200 extra payment in month 1 can reduce total interest by $120–$150 depending on the principal. The savings shrink the later you make the extra payment, which is why the common advice is to make extra payments as early as possible. Always confirm with your lender that the extra amount is applied to principal, not credited as an early next payment.
What is the difference between a fixed-rate and variable-rate loan?
A fixed-rate loan locks in the same interest rate — and therefore the same monthly payment — for the entire repayment period. A variable-rate (or adjustable-rate) loan starts with a rate that is tied to a market benchmark (such as the prime rate or SOFR) and adjusts periodically, usually annually. Variable rates often start lower than fixed rates, but they expose you to payment increases if benchmark rates rise. This calculator models fixed-rate loans only; for variable-rate loans you would need to recalculate at each rate reset date.
Is it better to make bi-weekly payments instead of monthly?
Bi-weekly payments are simply half of the monthly payment made every two weeks, which results in 26 half-payments — or the equivalent of 13 full monthly payments — per year instead of 12. That one extra payment per year reduces the principal faster and can cut years off a longer-term loan. For a 30-year mortgage, bi-weekly payments typically save about 4–5 years and tens of thousands of dollars in interest. For shorter-term personal or auto loans the savings are smaller but still meaningful. Some lenders charge a fee to set up bi-weekly billing; making one extra payment yourself each year achieves exactly the same mathematical result.
What happens if I miss a payment?
Missing a payment typically triggers a late fee (often $25–$50 or 2–5% of the payment amount) and can result in the missed interest being added to your principal — called "negative amortization." After 30 days, most lenders report the delinquency to the credit bureaus, which can lower your credit score by 50–100 points. After 90–180 days of non-payment, the lender may charge off the debt or begin collections proceedings. Contact your lender immediately if you anticipate missing a payment — most offer hardship deferral or forbearance options that avoid the worst consequences.
Why does my first payment include more interest than my last?
Because interest is calculated on the remaining balance each month. In month 1, the balance is the full loan amount, so the interest charge is at its maximum. After every payment, the balance decreases slightly, so the next month's interest is a tiny bit lower. Over time, the principal portion of each payment grows and the interest portion shrinks, but the total monthly payment stays constant. By the final payment, almost the entire amount is principal, with only a few cents of interest remaining. This is the nature of a "fully amortizing" loan — see the amortization schedule above for a month-by-month view.