Loan Calculator

How this loan calculator works

Most installment loans (personal loans, auto loans, student loans and fixed-rate mortgages) are amortizing loans: you pay the same fixed amount every month for the life of the loan, but the split between principal (what reduces your balance) and interest (what the lender charges you for borrowing) changes every month. Early on, a larger share of each payment goes toward interest, because interest is calculated on the current (still-large) balance. As the balance shrinks, more of each payment goes toward principal instead.

The calculator uses the standard fixed-rate amortization formula lenders use to set your payment (see the full formula, explained step by step, if you want to see exactly how the math works): your loan amount, your monthly interest rate (your annual rate divided by 12), and the number of payments determine a single fixed monthly payment that pays the loan down to exactly $0 by the end of the term, with interest calculated on the remaining balance each month.

Three numbers control the result:

• Loan amount: the amount you are borrowing (not including a down payment).
• Interest rate: your loan's annual interest rate. If your lender quotes an APR that already includes fees, use that number for the most accurate estimate of your true monthly cost.
• Loan term: how long you have to repay the loan, in years or months. A shorter term means a higher monthly payment but far less total interest; a longer term lowers the monthly payment but increases the total interest paid.

Worked examples

Three real calculations, run through the exact formula this calculator uses, to show how the same math applies across very different loan sizes:

• Personal loan: $8,000 at 9% APR for 3 years (36 months) -> $254.40/month, $1,158.31 total interest, $9,158.31 total cost.
• Auto loan: $28,000 at 6.5% APR for 5 years (60 months) -> $547.85/month, $4,871.15 total interest, $32,871.15 total cost.
• Mortgage-scale loan: $220,000 at 6.75% APR for 30 years (360 months) -> $1,426.92/month, $293,686.34 total interest, $513,686.34 total cost.

How loan term changes your total cost

The single biggest lever you control is the loan term. Using a $20,000 loan at a 7% interest rate as an example, here is what happens to the monthly payment and the total interest as the term stretches out:

Stretching the same $20,000 loan from 3 years to 7 years cuts the monthly payment by more than half, but more than doubles the total interest paid. There is no universally "right" answer: a longer term makes sense if the lower payment meaningfully improves your monthly budget, while a shorter term makes sense whenever you can comfortably afford the higher payment, since it is the cheaper option overall.

Reading your amortization schedule

Click "Show yearly amortization schedule" under the calculator to see, year by year, how much of your payments went to principal versus interest, and what your remaining balance was at the end of each year. A few things to look for:

• The interest column shrinks over time, and the principal column grows, even though your payment stays exactly the same every month. That is the defining feature of an amortizing loan.
• The first year typically carries the most interest relative to principal of any year in the loan (except on a 0% loan, where every payment is pure principal from day one).
• The starting balance of each row equals the ending balance of the row before it: that consistency is a useful sanity check when comparing scenarios by hand.

See the full amortization schedule explainer for a complete worked example with every year shown. The schedule is also what you see if you print or save the calculator as a PDF: the full table is included on the printed page even if you have not expanded it on screen, so you always have a complete record to keep or share.

Fixed-rate vs. variable-rate loans

This calculator assumes a fixed-rate loan: one interest rate for the entire term, and one payment amount that never changes. That covers the overwhelming majority of personal loans, auto loans, student loans and fixed-rate mortgages, and it is what makes the math predictable enough to compute a full amortization schedule up front.

Some loans instead carry a variable (or adjustable) rate, where the interest rate can move up or down over time, usually tied to a benchmark rate set by a central bank or index. An adjustable-rate mortgage, for example, often starts with a lower fixed "teaser" rate for the first few years before switching to a rate that adjusts periodically. A variable-rate loan cannot be modeled with a single amortization schedule the way a fixed-rate loan can, because the payment itself can change mid-term. If you are comparing a fixed-rate offer against a variable-rate offer, this calculator can show you exactly what the fixed-rate option costs; the variable-rate option's true cost depends on how the underlying rate moves over the years, which nobody can know in advance.

What affects the interest rate you're offered

Lenders do not offer the same rate to everyone. A few factors consistently move the interest rate you are quoted:

• Credit history: a longer track record of on-time payments and lower existing debt typically qualifies a borrower for a lower rate.
• Loan term: shorter-term loans often carry a somewhat lower rate than longer-term loans for the same borrower, because the lender's money is at risk for less time.
• Collateral: a secured loan (backed by an asset the lender can repossess, like a car or a house) typically carries a lower rate than an unsecured personal loan, because the lender has recourse if you stop paying.
• Loan type and lender: credit unions, online lenders, banks and dealership financing routinely quote different rates for what is otherwise the same loan amount and term, which is why comparing more than one offer before committing is worth the time.

None of these factors change how this calculator works: once you know your actual rate, plug it in above along with the amount and term to see your real payment.

Before you apply: a few things worth checking

A calculator can only work with the numbers you give it, so it is worth double-checking a few things before you rely on the result:

• Confirm whether the quoted rate is your interest rate or your APR. If a lender advertises multiple rates for different loan terms, run each one through the calculator separately rather than assuming the advertised "as low as" rate applies to your situation.
• Ask whether there is an origination fee or other upfront cost. Some lenders deduct a fee from the amount you actually receive, which effectively raises your true cost of borrowing above what the interest rate alone suggests.
• Check for a prepayment penalty. Most personal and auto loans do not have one, but it is worth confirming before assuming you can pay the loan off early without a fee if your situation changes.
• Compare the total cost, not just the monthly payment. Two loans with the same monthly payment can have very different total costs if one has a longer term at a lower rate and the other has a shorter term at a higher rate; the "total cost of loan" figure this calculator shows is the number to compare across offers.

What this calculator does not do

To be upfront about scope: this is a standard fixed-rate amortized-loan calculator. It assumes a single, unchanging interest rate and a single fixed monthly payment for the entire term, which covers the large majority of personal loans, auto loans, student loans and fixed-rate mortgages. It does not model an adjustable-rate loan whose rate changes partway through the term, a loan with a large final balloon payment, or the effect of making extra payments toward an existing loan to pay it off early. If you already have a loan and want to see how extra payments would change your payoff date, that is a distinct calculation from the one this page is built for.

It also does not include costs that sit alongside a loan payment rather than inside it: an auto loan payment calculated here does not include sales tax, registration or insurance, and a mortgage payment calculated here does not include property taxes, homeowners insurance, private mortgage insurance (PMI), or homeowners association dues. For a full picture of your total monthly housing or vehicle cost, add those separately on top of the payment shown here.