Loan Calculator
Work out the monthly payment, the total interest and the amortization schedule for a fixed-rate loan. The schedule lists every payment with its interest, its principal and the balance you still owe. Use it for a personal loan, a car loan or any other loan with equal monthly payments.
How to use the Loan Calculator
- Enter the loan amount, the annual interest rate and the term. The term is years plus additional months, so enter 18 months as 1 year and 6 months.
- Press the Calculate button. You get the monthly payment, the total payment and the total interest, with the amortization schedule below them.
- The schedule opens with the first 12 payments. The Show all button under the table adds the rest, down to a balance of 0.00.
- To try other numbers, change any value and press Calculate again.
The loan payment formula
M = P · r(1 + r)^n / ((1 + r)^n − 1)
M is the monthly payment, P is the loan amount, r is the annual rate divided by 12 and n is the number of monthly payments. The calculator rounds M to the cent. Each month it charges interest of r times the balance, rounded to the cent, and the rest of the payment reduces the balance. The last payment clears whatever balance is left, so it can differ from the others. At 0% the payment is P divided by n. On a long loan at a high rate, M can round to exactly the first month's interest, and then the balance would never fall. The calculator adds one cent to M in that case and tells you so. $10,000 at 35.99% over 30 years has a first month's interest of $299.92, so the payment is $299.93, and the loan is paid off in 340 payments instead of 360.
Worked example
A $25,000 loan at 9.5% over 5 years has a monthly payment of $525.05. Of the first payment, $197.92 is interest and $327.13 is principal, which leaves a balance of $24,672.87. Of the second, $195.33 is interest and $329.72 is principal, and the balance falls to $24,343.15. After 12 payments you still owe $20,898.90. The last of the 60 payments is $524.80. In total you pay $31,502.75, of which $6,502.75 is interest.
Frequently asked questions
What is loan amortization?
Amortization is paying off a loan in equal payments. Each payment covers that month's interest first, and the rest reduces the balance. As the balance falls, the interest share shrinks and the principal share grows. On a $25,000 loan at 9.5% over 5 years, interest is $197.92 of the first payment and $4.12 of the last.
How do I read the amortization schedule?
Each row is one monthly payment. Interest is what the lender charges on the balance for that month, Principal is the part of the payment that reduces the balance, and Balance is what you still owe afterwards. The last row ends at 0.00, and the totals row matches the calculator's Total Payment and Total Interest figures. If you only want the schedule, use the amortization calculator, which starts from a 30-year loan.
Why is the last payment different from the others?
The calculator rounds the monthly payment to the cent, and each month's interest too. After the level payments some balance is left over, or the balance runs out before the term ends. The last payment pays that month's interest plus whatever balance is left. On a $25,000 loan at 9.5% over 5 years it is $524.80, against $525.05 for the others. On a small loan over a long term the nearest cent can leave a much larger last payment. $500 at 18% over 35 years would be $7.51 a month and a last payment of $187.63, because the fraction of a cent missing each month earns interest for 35 years. When the last payment would be more than 1% above the others, the calculator rounds the payment up a cent at a time until it is not. At $7.52 the loan is paid off in 400 payments, and the last one is $4.20. The calculator states the last payment whenever it differs.
How does the interest rate affect my payment?
A higher rate raises both the monthly payment and the total interest. At 9.5%, a $25,000 loan over 5 years costs $525.05 a month and $6,502.75 in interest. At 10.5% it costs $537.35 a month and $7,240.78 in interest, so one point on the rate adds $12.30 to the payment and $738.03 to the interest.
Can I calculate an interest-free loan?
Yes. Enter 0 as the interest rate. A $12,000 loan over 4 years is then 48 payments of $250.00, the interest column is all zeros and the total you pay is $12,000.00.
Does paying extra reduce total interest?
Yes. An extra payment that goes to principal lowers the balance, and the lender works out every later interest charge on that lower balance. You pay less interest and finish sooner. This calculator assumes the same payment every month, so its schedule does not show extra payments.
What is APR vs. interest rate?
The interest rate is what the lender charges on the balance. APR adds origination fees, points and some other charges to that, so it is usually the higher number. Enter the interest rate in this calculator. It does not add fees.