Payment Calculator
Find the monthly payment on a fixed-rate loan from the loan amount, the term in years and the annual interest rate. For an interest-free loan, enter 0 as the rate. Or switch to payoff time, enter what you can pay each month, and see how many months the loan takes to pay off. Both modes show the total you pay and the total interest, added up payment by payment in whole cents.
How to use the Payment Calculator
- Pick Monthly payment to find the payment for a term, or Payoff time to find how long a payment you choose takes to clear the loan.
- Enter the loan amount and the annual interest rate. For an interest-free loan, enter 0 as the rate.
- Enter the term in years, or in payoff time mode the amount you pay each month, then press Calculate.
The 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 months. At 0% the payment is P ÷ n. The calculator rounds M to the cent and then runs the loan month by month. Each month it adds the interest on the balance, rounded to the cent, and takes off the payment. The last payment is whatever balance is left plus that month's interest, so it is rarely exactly M. If the nearest cent would leave a last payment more than 1% above M, the calculator rounds M up a cent at a time until it is not. At 30% over 30 years, $234,528.26 would cost $5,864.01 a month and $7,497.41 at the end. The calculator charges $5,864.02, and the last payment is $4,423.43. On a long loan at a high rate that extra cent can also pay the loan off early, and the result says so when that happens. The total payment is all the payments added up, and the total interest is that total minus P. Sometimes M rounds to exactly the first month's interest, and at that payment the balance would never fall. The calculator then adds one cent to the payment and tells you. $10,000 at 35.99% over 30 years pays $299.93 a month instead of $299.92 and is paid off in 340 payments. If M rounds to $0.00, the calculator says so instead of giving a payment. Payoff time mode works the other way round. Each month it adds the interest on the balance, rounded to the cent, takes off your payment and counts the month, until the balance is gone. The last payment covers only what is left, so it can be smaller than the others. A payment that is no more than the first month's interest never brings the balance down, and the calculator says so instead of giving a number of months.
Worked example
For a $15,000 loan at 6% over 3 years, the calculator returns a monthly payment of $456.33, a total payment of $16,427.85 and total interest of $1,427.85. Rounding makes the 36th payment $456.30. Stretch the term to 5 years and the payment falls to $289.99, with a last payment of $290.17, while the total interest rises to $2,399.58. Now switch to payoff time and pay $300 a month on the same loan. It is paid off in 58 months, which is 4 years and 10 months. The first 57 payments are $300.00 and the last one is $204.28. Total interest comes to $2,304.28, which is $95.30 less than the 5-year term costs, for $10.01 more a month.
Frequently asked questions
How does a longer term change the payment?
It lowers the monthly payment and raises the total interest. On a $15,000 loan at 6%, going from 3 years to 5 cuts the payment from $456.33 to $289.99 and adds $971.73 of interest.
How do I find a term that fits my budget?
Change the term until the monthly payment is at or below what you can pay each month. On $15,000 at 6%, a budget of $300 a month fits a 5-year term, which costs $289.99 a month.
How long will it take to pay off my loan?
Pick Payoff time and enter the balance, the annual rate and what you pay each month. On $15,000 at 6%, $300 a month takes 58 months, or 4 years and 10 months, and costs $2,304.28 in interest. Raise the payment to $400 and it takes 42 months, 3 years and 6 months, with $1,652.85 of interest.
Why does it say my loan would never be repaid?
Because the payment does not cover the interest. On $15,000 at 6% the first month's interest is $75.00, so paying $75 a month or less leaves the balance where it is or lets it grow. Anything above $75 clears the loan in the end, but slowly: $80 a month takes 556 months, more than 46 years, and costs $29,473.06 in interest.
How do I calculate a 0% loan payment?
Divide the loan amount by the number of monthly payments and round to the cent. A $2,500 loan at 0% over 3 years has 36 payments, and $2,500 ÷ 36 is $69.444, so the payment is $69.44. The first 35 payments come to $2,430.40, and the last one is the $69.60 that is left. You pay $2,500.00 in total and $0.00 in interest. Enter 2500 as the amount, 0 as the rate and 3 as the term, and the calculator shows these figures.
What if the loan has no interest?
Enter 0 as the rate. The monthly payment is then the loan amount divided by the number of months, so $1,200 over 1 year is $100 a month. In payoff time mode, $1,000 paid at $150 a month takes 7 months: six payments of $150 and a last one of $100.
Why does the 5-year payment take 61 months in payoff time mode?
Because the payment is rounded to the cent. On $15,000 at 6% over 5 years the exact payment is a fraction of a cent above $289.99. Pay $289.99 for 60 months and 18 cents is still owed, so payoff time mode adds a 61st payment of $0.18. Monthly payment mode puts those cents into the 60th payment instead, which makes it $290.17. The schedule on the loan calculator does the same.
Does this work for credit cards?
Yes, if you pay the same amount every month and stop adding charges. Enter the card balance, its APR and your monthly payment in payoff time mode. The calculator charges interest once a month at the APR divided by 12. A card that charges interest daily can cost a little more. If you pay only the minimum, the payment shrinks as the balance falls, and this calculator does not follow that.