Loan Calculator
Estimate the fixed monthly payment on a personal or auto-style loan from the amount, rate and term. Compare terms and see what extra payments save.
Calculate
Monthly payment
The formula
Standard amortizing loan payment. With optional extra principal each month, the schedule shortens and total interest falls.
Worked example
- P = $20,000, r = 6%/12, n = 60
- Monthly payment ≈ $386.66; total interest ≈ $3,199
- At 5 years the balance reaches $0 (Oct 2031 from a mid-2026 start in this example)
Result: Payment: $386.66/mo · Total ≈ $23,199
How monthly payments are calculated
A standard amortizing loan keeps the payment amount fixed. Early installments are mostly interest; later ones pay down more principal.
Monthly rate and term
r is the annual rate divided by 12. n is the number of months. P is the amount borrowed. The formula returns the fixed payment M.
Extra payments
Any extra amount is applied to principal after that month’s interest. The required payment stays the same until the balance is cleared early.
APR vs. nominal rate
US consumer loans often advertise APR, which folds in certain fees. This tool treats the rate you enter as a nominal annual interest rate — always compare the APR and fee schedule on the actual offer.
What we do not model
Interest-only periods, prepayment penalties, insurance add-ons, and mortgage-specific rules (escrow, PMI) are omitted. For a home loan, use the mortgage calculator.
Interesting facts
Amortization
Early payments are mostly interest; later payments pay down more principal.
Shorter terms cost less overall
A 36-month loan usually has a higher monthly bill than a 60-month loan for the same rate, but you pay less total interest.
Rate shopping beats brand loyalty
Comparing credit unions, banks, and online lenders often saves more than small fee differences.
Extra principal cuts the schedule
Paying more than the minimum toward principal shortens the loan and reduces total interest when the lender applies extras to principal.
Frequently asked questions
Principal, interest rate, and loan term length. Fees and insurance can raise the cash you actually pay even when the formula payment is unchanged.
It is a principal-and-interest estimate only. Taxes, insurance, and fees are not included unless you fold them into the amount or rate yourself.
Enter an optional extra amount per month. We apply it to principal after interest each month, which can clear the loan sooner and cut total interest.
It works for a simple amortizing estimate, but home loans often add escrow, PMI, and points. Prefer a dedicated mortgage calculator for housing.
Use M = P × [r(1+r)^n] / [(1+r)^n − 1], where P is principal, r is the monthly rate (APR/12 as a decimal), and n is the number of months.
An amortizing loan keeps the payment amount fixed while the mix of interest and principal changes: early payments are interest-heavy; later payments reduce principal faster.
References
- What is a Loan Estimate? Explains key loan cost disclosures in consumer credit.
- Shopping for a loan Compare APR, fees, and term length before signing.