finance calculator

Loan Calculator

Calculate payments, interest cost, and payoff schedule for any loan.

Formula Verified by Dr. Elizabeth Vance, PhD

Quick actions: Save inputs, view saved runs, print, share, or export results

Saved Runs

Inputs

Loan amount$

Interest rate%

Termyears

Results

Monthly payment

$495

Total payment$29,702

Total interest$4,702

Number of payments60 payments

Bookmark this Loan Calculator

Lender quotes change frequently. Save this page to quickly verify monthly costs, amortization breakdowns, or total lifetime borrowing costs.

Formula

Loan payment formula

Payment = P x (r(1+r)^n / ((1+r)^n - 1))

This standard amortization formula calculates a fixed payment from principal, monthly rate, and payment count.

Step by step

How the calculation works

1Enter the loan amount, annual rate, and term in years.
2The calculator converts the term into monthly payments.
3It reports the monthly payment, total repayment, and total interest.

Example

Loan example

A $25,000 loan at 7% for 5 years produces an estimated payment near $495 per month, with total interest shown separately so the full borrowing cost is clear.

Related guides

Learn more about this calculation

Guide

Loan Payment Guide: Formula, Interest, and Total Cost

Learn how fixed loan payments are calculated, why term length changes total interest, and how the DTC loan calculator matches amortization math.

Guide

Debt Snowball vs Avalanche: Compare Payoff Methods

Compare debt snowball and avalanche payoff methods, see how ordering changes interest and timing, and model both with the DTC calculator.

Period	Payment	Principal	Interest	Balance
Month 1	$495	$349	$146	$24,651
Month 2	$495	$351	$144	$24,300
Month 3	$495	$353	$142	$23,946
Month 4	$495	$355	$140	$23,591
Month 5	$495	$357	$138	$23,234
Month 6	$495	$360	$136	$22,874
Month 7	$495	$362	$133	$22,512
Month 8	$495	$364	$131	$22,149
Month 9	$495	$366	$129	$21,783
Month 10	$495	$368	$127	$21,415
Month 11	$495	$370	$125	$21,045
Month 12	$495	$372	$123	$20,673
Month 13	$495	$374	$121	$20,298
Month 14	$495	$377	$118	$19,921
Month 15	$495	$379	$116	$19,543
Month 16	$495	$381	$114	$19,162
Month 17	$495	$383	$112	$18,778
Month 18	$495	$385	$110	$18,393
Month 19	$495	$388	$107	$18,005
Month 20	$495	$390	$105	$17,615
Month 21	$495	$392	$103	$17,223
Month 22	$495	$395	$100	$16,828
Month 23	$495	$397	$98	$16,431
Month 24	$495	$399	$96	$16,032
Month 25	$495	$402	$94	$15,631
Month 26	$495	$404	$91	$15,227
Month 27	$495	$406	$89	$14,821
Month 28	$495	$409	$86	$14,412
Month 29	$495	$411	$84	$14,001
Month 30	$495	$413	$82	$13,588
Month 31	$495	$416	$79	$13,172
Month 32	$495	$418	$77	$12,754
Month 33	$495	$421	$74	$12,333
Month 34	$495	$423	$72	$11,910
Month 35	$495	$426	$69	$11,485
Month 36	$495	$428	$67	$11,057
Month 37	$495	$431	$64	$10,626
Month 38	$495	$433	$62	$10,193
Month 39	$495	$436	$59	$9,757
Month 40	$495	$438	$57	$9,319
Month 41	$495	$441	$54	$8,879
Month 42	$495	$443	$52	$8,435
Month 43	$495	$446	$49	$7,990
Month 44	$495	$448	$47	$7,541
Month 45	$495	$451	$44	$7,090
Month 46	$495	$454	$41	$6,636
Month 47	$495	$456	$39	$6,180
Month 48	$495	$459	$36	$5,721
Month 49	$495	$462	$33	$5,259
Month 50	$495	$464	$31	$4,795
Month 51	$495	$467	$28	$4,328
Month 52	$495	$470	$25	$3,858
Month 53	$495	$473	$23	$3,386
Month 54	$495	$475	$20	$2,910
Month 55	$495	$478	$17	$2,432
Month 56	$495	$481	$14	$1,952
Month 57	$495	$484	$11	$1,468
Month 58	$495	$486	$9	$981
Month 59	$495	$489	$6	$492
Month 60	$495	$492	$3	$0

Period

Payment

Principal

Interest

Balance

Month 1

$495

$349

$146

$24,651

Month 2

$495

$351

$144

$24,300

Month 3

$495

$353

$142

$23,946

Month 4

$495

$355

$140

$23,591

Month 5

$495

$357

$138

$23,234

Month 6

$495

$360

$136

$22,874

Month 7

$495

$362

$133

$22,512

Month 8

$495

$364

$131

$22,149

Month 9

$495

$366

$129

$21,783

Month 10

$495

$368

$127

$21,415

Month 11

$495

$370

$125

$21,045

Month 12

$495

$372

$123

$20,673

Month 13

$495

$374

$121

$20,298

Month 14

$495

$377

$118

$19,921

Month 15

$495

$379

$116

$19,543

Month 16

$495

$381

$114

$19,162

Month 17

$495

$383

$112

$18,778

Month 18

$495

$385

$110

$18,393

Month 19

$495

$388

$107

$18,005

Month 20

$495

$390

$105

$17,615

Month 21

$495

$392

$103

$17,223

Month 22

$495

$395

$100

$16,828

Month 23

$495

$397

$98

$16,431

Month 24

$495

$399

$96

$16,032

Month 25

$495

$402

$94

$15,631

Month 26

$495

$404

$91

$15,227

Month 27

$495

$406

$89

$14,821

Month 28

$495

$409

$86

$14,412

Month 29

$495

$411

$84

$14,001

Month 30

$495

$413

$82

$13,588

Month 31

$495

$416

$79

$13,172

Month 32

$495

$418

$77

$12,754

Month 33

$495

$421

$74

$12,333

Month 34

$495

$423

$72

$11,910

Month 35

$495

$426

$69

$11,485

Month 36

$495

$428

$67

$11,057

Month 37

$495

$431

$64

$10,626

Month 38

$495

$433

$62

$10,193

Month 39

$495

$436

$59

$9,757

Month 40

$495

$438

$57

$9,319

Month 41

$495

$441

$54

$8,879

Month 42

$495

$443

$52

$8,435

Month 43

$495

$446

$49

$7,990

Month 44

$495

$448

$47

$7,541

Month 45

$495

$451

$44

$7,090

Month 46

$495

$454

$41

$6,636

Month 47

$495

$456

$39

$6,180

Month 48

$495

$459

$36

$5,721

Month 49

$495

$462

$33

$5,259

Month 50

$495

$464

$31

$4,795

Month 51

$495

$467

$28

$4,328

Month 52

$495

$470

$25

$3,858

Month 53

$495

$473

$23

$3,386

Month 54

$495

$475

$20

$2,910

Month 55

$495

$478

$17

$2,432

Month 56

$495

$481

$14

$1,952

Month 57

$495

$484

$11

$1,468

Month 58

$495

$486

$981

Month 59

$495

$489

$492

Month 60

$495

$492

How to understand and use this calculator

The Anatomy of an Amortizing Installment Loan

An installment loan is a closed-end borrowing agreement where a fixed principal amount is advanced to the borrower and repaid over a set term with equal periodic payments. Understanding this structure is essential for personal loans, auto financing, and consumer installment plans.

Unlike revolving credit (such as credit cards), installment loans have a defined end date. Each monthly payment is split between covering the interest accrued on the remaining balance and paying down the principal. In the early months, because the principal balance is high, a larger portion of the payment goes toward interest. In the later months, the ratio reverses, accelerating equity pay-down.

The Amortization Payment Formula

To calculate the exact monthly payment required for a fixed-rate amortizing loan, lenders apply standard interest amortization math:

$$PMT = P \times \frac{r(1 + r)^n}{(1 + r)^n - 1}$$

Where:

* $PMT$ is the equal monthly payment.

* $P$ is the principal loan amount borrowed.

* $r$ is the monthly interest rate (Annual Percentage Rate divided by 12 months).

* $n$ is the total number of monthly payments (Term Years multiplied by 12).

This equation ensures the loan is exactly paid to zero by the final month. It shows why extending the loan term (e.g., from 3 to 5 years) reduces the monthly payment but directly increases the total interest paid, as interest is given more time to compound on the outstanding balance.

The Real Cost of Borrowing: Interest vs. Principal

The sticker price of a loan is not its true cost. The actual cost is the principal plus the total interest accrued over the life of the loan. This tool calculates both, showing the interest drag.

Borrowers often negotiate monthly payments instead of total interest. Lenders can easily meet a monthly payment target by extending the term, which dramatically inflates the total amount paid. Always verify the Total Repayment and Annual Percentage Rate (APR) before signing.

Fees, Prepayment Rules, and Debt Consolidation

When comparing personal loans, verify the Origination Fee, which ranges from 1% to 8% and is often deducted from the loan payout, meaning you receive less cash than you borrow.

Also, check for Prepayment Penalties (fees charged if you pay off the loan early). Selecting a loan with no prepayment penalty allows you to make extra payments toward the principal, cutting total interest costs and accelerating your debt-free timeline.

Related concepts

APR

Annual Percentage Rate: the complete annual cost of borrowing including fees.

Amortization

The mathematical breakdown of debt payments into principal and interest over a fixed timeline.

Origination Fee

An upfront processing fee deducted from the loan payout by the lender.

Frequently Asked Questions

Why does a longer loan term cost more?+

A longer term spreads the principal repayment over more months, lowering the monthly payment. However, it gives interest more time to compound, which increases the total lifetime interest paid.

Can I use this for a personal loan?+

Yes. The calculator applies to most standard fixed-rate personal loans, peer-to-peer loans, and installment contracts where payments are equal and regular.

Does the payment include lender fees?+

No. The payment is calculated using the principal, interest rate, and term. Prepayment, origination, or insurance fees are not included and should be factored in separately.

What is the difference between APR and interest rate?+

The interest rate is the base cost of borrowing the principal. The APR (Annual Percentage Rate) includes the interest rate plus upfront fees (like origination fees), representing the true annual cost.

How does making extra payments shorten the loan?+

Extra payments are applied directly to the principal balance. Reducing the principal reduces the base on which interest is calculated for all subsequent months, shortening the term.

What is a prepayment penalty?+

A prepayment penalty is a fee charged by some lenders if you pay off the loan balance before the end of the agreed term, compensating them for lost interest.

What is an origination fee?+

An origination fee is an upfront fee charged by lenders to process a new loan application, typically deducted from the loan proceeds at funding.

How does my credit score affect my loan options?+

Higher credit scores indicate lower risk to lenders, qualifying you for lower interest rates and lower origination fees, which directly reduces borrowing costs.

What is a secured vs. unsecured loan?+

Secured loans require collateral (like a car or home) that the lender can seize if you default. Unsecured loans (like personal loans) require no collateral but carry higher interest rates.

How is interest calculated each month?+

Monthly interest is calculated by multiplying the outstanding principal balance by the monthly interest rate (APR / 12). The remainder of your payment goes to principal.

Period	Payment	Principal	Interest	Balance
Month 1	$495	$349	$146	$24,651
Month 2	$495	$351	$144	$24,300
Month 3	$495	$353	$142	$23,946
Month 4	$495	$355	$140	$23,591
Month 5	$495	$357	$138	$23,234
Month 6	$495	$360	$136	$22,874
Month 7	$495	$362	$133	$22,512
Month 8	$495	$364	$131	$22,149
Month 9	$495	$366	$129	$21,783
Month 10	$495	$368	$127	$21,415
Month 11	$495	$370	$125	$21,045
Month 12	$495	$372	$123	$20,673
Month 13	$495	$374	$121	$20,298
Month 14	$495	$377	$118	$19,921
Month 15	$495	$379	$116	$19,543
Month 16	$495	$381	$114	$19,162
Month 17	$495	$383	$112	$18,778
Month 18	$495	$385	$110	$18,393
Month 19	$495	$388	$107	$18,005
Month 20	$495	$390	$105	$17,615
Month 21	$495	$392	$103	$17,223
Month 22	$495	$395	$100	$16,828
Month 23	$495	$397	$98	$16,431
Month 24	$495	$399	$96	$16,032
Month 25	$495	$402	$94	$15,631
Month 26	$495	$404	$91	$15,227
Month 27	$495	$406	$89	$14,821
Month 28	$495	$409	$86	$14,412
Month 29	$495	$411	$84	$14,001
Month 30	$495	$413	$82	$13,588
Month 31	$495	$416	$79	$13,172
Month 32	$495	$418	$77	$12,754
Month 33	$495	$421	$74	$12,333
Month 34	$495	$423	$72	$11,910
Month 35	$495	$426	$69	$11,485
Month 36	$495	$428	$67	$11,057
Month 37	$495	$431	$64	$10,626
Month 38	$495	$433	$62	$10,193
Month 39	$495	$436	$59	$9,757
Month 40	$495	$438	$57	$9,319
Month 41	$495	$441	$54	$8,879
Month 42	$495	$443	$52	$8,435
Month 43	$495	$446	$49	$7,990
Month 44	$495	$448	$47	$7,541
Month 45	$495	$451	$44	$7,090
Month 46	$495	$454	$41	$6,636
Month 47	$495	$456	$39	$6,180
Month 48	$495	$459	$36	$5,721
Month 49	$495	$462	$33	$5,259
Month 50	$495	$464	$31	$4,795
Month 51	$495	$467	$28	$4,328
Month 52	$495	$470	$25	$3,858
Month 53	$495	$473	$23	$3,386
Month 54	$495	$475	$20	$2,910
Month 55	$495	$478	$17	$2,432
Month 56	$495	$481	$14	$1,952
Month 57	$495	$484	$11	$1,468
Month 58	$495	$486	$9	$981
Month 59	$495	$489	$6	$492
Month 60	$495	$492	$3	$0

Period

Payment

Principal

Interest

Balance

Month 1

$495

$349

$146

$24,651

Month 2

$495

$351

$144

$24,300

Month 3

$495

$353

$142

$23,946

Month 4

$495

$355

$140

$23,591

Month 5

$495

$357

$138

$23,234

Month 6

$495

$360

$136

$22,874

Month 7

$495

$362

$133

$22,512

Month 8

$495

$364

$131

$22,149

Month 9

$495

$366

$129

$21,783

Month 10

$495

$368

$127

$21,415

Month 11

$495

$370

$125

$21,045

Month 12

$495

$372

$123

$20,673

Month 13

$495

$374

$121

$20,298

Month 14

$495

$377

$118

$19,921

Month 15

$495

$379

$116

$19,543

Month 16

$495

$381

$114

$19,162

Month 17

$495

$383

$112

$18,778

Month 18

$495

$385

$110

$18,393

Month 19

$495

$388

$107

$18,005

Month 20

$495

$390

$105

$17,615

Month 21

$495

$392

$103

$17,223

Month 22

$495

$395

$100

$16,828

Month 23

$495

$397

$98

$16,431

Month 24

$495

$399

$96

$16,032

Month 25

$495

$402

$94

$15,631

Month 26

$495

$404

$91

$15,227

Month 27

$495

$406

$89

$14,821

Month 28

$495

$409

$86

$14,412

Month 29

$495

$411

$84

$14,001

Month 30

$495

$413

$82

$13,588

Month 31

$495

$416

$79

$13,172

Month 32

$495

$418

$77

$12,754

Month 33

$495

$421

$74

$12,333

Month 34

$495

$423

$72

$11,910

Month 35

$495

$426

$69

$11,485

Month 36

$495

$428

$67

$11,057

Month 37

$495

$431

$64

$10,626

Month 38

$495

$433

$62

$10,193

Month 39

$495

$436

$59

$9,757

Month 40

$495

$438

$57

$9,319

Month 41

$495

$441

$54

$8,879

Month 42

$495

$443

$52

$8,435

Month 43

$495

$446

$49

$7,990

Month 44

$495

$448

$47

$7,541

Month 45

$495

$451

$44

$7,090

Month 46

$495

$454

$41

$6,636

Month 47

$495

$456

$39

$6,180

Month 48

$495

$459

$36

$5,721

Month 49

$495

$462

$33

$5,259

Month 50

$495

$464

$31

$4,795

Month 51

$495

$467

$28

$4,328

Month 52

$495

$470

$25

$3,858

Month 53

$495

$473

$23

$3,386

Month 54

$495

$475

$20

$2,910

Month 55

$495

$478

$17

$2,432

Month 56

$495

$481

$14

$1,952

Month 57

$495

$484

$11

$1,468

Month 58

$495

$486

$981

Month 59

$495

$489

$492

Month 60

$495

$492

How to understand and use this calculator

The Anatomy of an Amortizing Installment Loan

The Amortization Payment Formula

To calculate the exact monthly payment required for a fixed-rate amortizing loan, lenders apply standard interest amortization math:

$$PMT = P \times \frac{r(1 + r)^n}{(1 + r)^n - 1}$$

Where:

* $PMT$ is the equal monthly payment.

* $P$ is the principal loan amount borrowed.

* $r$ is the monthly interest rate (Annual Percentage Rate divided by 12 months).

* $n$ is the total number of monthly payments (Term Years multiplied by 12).

The Real Cost of Borrowing: Interest vs. Principal

The sticker price of a loan is not its true cost. The actual cost is the principal plus the total interest accrued over the life of the loan. This tool calculates both, showing the interest drag.

Fees, Prepayment Rules, and Debt Consolidation

When comparing personal loans, verify the Origination Fee, which ranges from 1% to 8% and is often deducted from the loan payout, meaning you receive less cash than you borrow.

Related concepts

APR

Annual Percentage Rate: the complete annual cost of borrowing including fees.

Amortization

The mathematical breakdown of debt payments into principal and interest over a fixed timeline.

Origination Fee

An upfront processing fee deducted from the loan payout by the lender.

Frequently Asked Questions

Why does a longer loan term cost more?+

A longer term spreads the principal repayment over more months, lowering the monthly payment. However, it gives interest more time to compound, which increases the total lifetime interest paid.

Can I use this for a personal loan?+

Yes. The calculator applies to most standard fixed-rate personal loans, peer-to-peer loans, and installment contracts where payments are equal and regular.

Does the payment include lender fees?+

No. The payment is calculated using the principal, interest rate, and term. Prepayment, origination, or insurance fees are not included and should be factored in separately.

What is the difference between APR and interest rate?+

How does making extra payments shorten the loan?+

Extra payments are applied directly to the principal balance. Reducing the principal reduces the base on which interest is calculated for all subsequent months, shortening the term.

What is a prepayment penalty?+

A prepayment penalty is a fee charged by some lenders if you pay off the loan balance before the end of the agreed term, compensating them for lost interest.

What is an origination fee?+

An origination fee is an upfront fee charged by lenders to process a new loan application, typically deducted from the loan proceeds at funding.

How does my credit score affect my loan options?+

Higher credit scores indicate lower risk to lenders, qualifying you for lower interest rates and lower origination fees, which directly reduces borrowing costs.

What is a secured vs. unsecured loan?+

Secured loans require collateral (like a car or home) that the lender can seize if you default. Unsecured loans (like personal loans) require no collateral but carry higher interest rates.

How is interest calculated each month?+

Monthly interest is calculated by multiplying the outstanding principal balance by the monthly interest rate (APR / 12). The remainder of your payment goes to principal.

Loan Calculator

Inputs

Results

Bookmark this Loan Calculator

Loan payment formula

How the calculation works

Loan example

Learn more about this calculation

Loan Payment Guide: Formula, Interest, and Total Cost

Debt Snowball vs Avalanche: Compare Payoff Methods

Loan Calculator

Inputs

Results

Bookmark this Loan Calculator

Key output metrics

Principal vs interest

Balance preview

Principal, interest, and balance timeline

How to understand and use this calculator

The Anatomy of an Amortizing Installment Loan

The Amortization Payment Formula

The Real Cost of Borrowing: Interest vs. Principal

Fees, Prepayment Rules, and Debt Consolidation

Related concepts

Frequently Asked Questions

Loan payment formula

How the calculation works

Loan example

Learn more about this calculation

Loan Payment Guide: Formula, Interest, and Total Cost

Debt Snowball vs Avalanche: Compare Payoff Methods

Key output metrics

Principal vs interest

Balance preview

Principal, interest, and balance timeline

How to understand and use this calculator

The Anatomy of an Amortizing Installment Loan

The Amortization Payment Formula

The Real Cost of Borrowing: Interest vs. Principal

Fees, Prepayment Rules, and Debt Consolidation

Related concepts

Frequently Asked Questions