Loan Calculator
Calculate your monthly loan payment, total interest, and total cost. Enter loan amount, interest rate, and term to get instant results.
Monthly Payment
$0.00
How to Use the Loan Calculator
Enter your loan amount, annual interest rate, and loan term. The calculator instantly shows your monthly payment, total interest paid, and total repayment amount.
Loan Payment Formula
M = P ร [r(1+r)โฟ] / [(1+r)โฟ โ 1] Where: M = monthly payment, P = principal, r = monthly rate, n = number of payments
Frequently Asked Questions
- Use the formula: M = P ร [r(1+r)โฟ] / [(1+r)โฟ โ 1], where P is the principal, r is the monthly interest rate (annual rate รท 12), and n is the total number of payments. For example, a $10,000 loan at 6.5% for 5 years = $195.66/month. Our calculator does this instantly.
- Total interest = (Monthly payment ร Number of payments) โ Principal. For a $10,000 loan at 6.5% over 5 years, monthly payment is ~$195.66, total paid = $11,739.60, so total interest = $1,739.60. The longer the loan term, the more interest you pay.
- The interest rate is the cost to borrow the principal. APR (Annual Percentage Rate) includes the interest rate plus fees (origination fees, broker fees, etc.), making it a more complete picture of the loan's true cost. Always compare APRs when shopping for loans.
- Multiply your monthly payment by the total number of payments, then subtract the original loan amount. Example: $300/month ร 60 months = $18,000 total paid. If you borrowed $15,000, your total interest is $3,000.
- Extra payments go directly toward reducing the principal, which reduces the total interest you pay and shortens the loan term. Even one extra payment per year can save hundreds or thousands of dollars in interest over the life of the loan.
- A longer term means lower monthly payments but significantly more total interest paid. A shorter term means higher monthly payments but less total interest. For example, a $20,000 loan at 7%: over 3 years = $617/mo ($2,212 interest); over 7 years = $303/mo ($5,468 interest).
- Amortization is the process of paying off a loan through regular scheduled payments. Early payments are mostly interest; later payments are mostly principal. This is why paying off a loan early saves significant interest โ you skip the interest-heavy later payments.
- Generally: 760+ = best rates; 700โ759 = good rates; 640โ699 = fair rates with higher costs; below 640 = subprime rates or denial. A difference of 100 points in credit score can change your rate by 1โ3%, saving thousands over a long loan.
- For business loans, ROI = (Net profit from investment รท Loan amount) ร 100. If you borrow $50,000 and generate $80,000 in profit, ROI = 60%. You should also subtract the total interest cost to get the true net ROI.
- A fixed-rate loan has the same interest rate for the entire term โ predictable payments. A variable-rate loan has a rate that changes with market conditions โ payments can go up or down. Fixed rates are safer for long-term planning; variable rates can save money if rates drop.