Loan Payment Calculator
Find out your exact monthly payment for any loan amount, rate, and term. Calculate total interest and compare payment options.
Monthly Payment
$0
How to Use the Loan Payment Calculator
Enter your loan amount, annual interest rate, and term in years. The calculator shows your monthly payment, total interest cost, and how much you'd save by paying 10% extra each month.
Loan Payment Formula
M = P ร [r(1+r)โฟ] / [(1+r)โฟ โ 1] P = principal ยท r = monthly rate (annual รท 12) ยท n = months
The Cost of Longer Terms
A $20,000 loan at 7% costs $396/month over 5 years ($3,761 interest) but only $232/month over 10 years ($7,841 interest). The 10-year loan has a 40% lower payment but costs twice as much in interest โ always compare total cost, not just monthly payment.
Frequently Asked Questions
- Use the formula: M = P ร [r(1+r)โฟ] / [(1+r)โฟ โ 1], where P = principal, r = monthly rate (annual rate รท 12), n = number of months. For a $15,000 loan at 8% for 4 years: r = 0.006667, n = 48, M = $366.19/month.
- Step 1: r = annual rate รท 12 (e.g., 8% โ 0.00667). Step 2: n = years ร 12. Step 3: Calculate (1+r)โฟ. Step 4: M = P ร r ร (1+r)โฟ รท [(1+r)โฟ โ 1]. A scientific calculator or spreadsheet PMT function makes this easy: =PMT(0.08/12, 48, -15000).
- An amortization schedule is a complete table of loan payments, showing for each payment: how much goes to principal, how much to interest, and the remaining balance. Early payments are mostly interest; later payments are mostly principal. This calculator shows the concept with first/last payment splits.
- Use Excel's PMT function: =PMT(rate/12, nper, -pv). For example, =PMT(0.07/12, 60, -20000) gives the monthly payment on a $20,000 loan at 7% for 5 years. The result is positive and represents your payment amount.
- Total interest = (Monthly payment ร Number of payments) โ Loan amount. For a $20,000 loan paid at $450/month for 48 months: total paid = $21,600, interest = $1,600. The longer the term, the more interest you pay even if monthly payments are lower.
- Options include: (1) Extend the loan term โ lower monthly payment but more total interest. (2) Refinance to a lower interest rate. (3) Pay down the principal with a lump sum. (4) Improve your credit score before applying. (5) Make a larger down payment on the original purchase.
- Extra payments reduce your principal directly, which reduces future interest charges and shortens your loan term. Even $50/month extra on a $20,000 car loan at 7% over 5 years saves about $400 in interest and cuts 3โ4 months off. Our calculator shows this exact savings.
- With regular payments, the payoff date is simply start date + number of months (n). With extra payments, use: n = โln(1 โ (P ร r / M)) / ln(1 + r), where M is the new higher payment. Our calculator shows how many months earlier you'll pay off with 10% extra.
- A simple interest loan charges interest only on the outstanding balance (common for short-term loans). An amortized loan has equal monthly payments where the interest/principal split changes each month. Most auto loans, mortgages, and personal loans are amortized.
- The minimum required payment on an installment loan equals the standard amortized payment calculated with the formula above. For revolving credit (credit cards), the minimum is typically 1โ2% of the balance or $25โ35, whichever is higher. Never pay just the minimum on high-interest debt.