Loan Details
Total amount you plan to borrow.
Annual percentage rate (APR).
Length of the loan in years.
Monthly Payment
$500.75
Total Interest
$5,045
Total Cost
$30,045
Payment Breakdown (First Payment)
Amortization Schedule
60 total payments
| # | Payment | Interest | Principal | Balance |
|---|
How Does This Loan Calculator Work?
This free loan calculator uses the standard amortization formula to compute your exact monthly payment based on three inputs: the loan amount, the annual interest rate, and the loan term in years. The formula is M = P [r(1+r)^n] / [(1+r)^n - 1], where P is the principal, r is the monthly interest rate, and n is the total number of payments.
What makes this tool useful is the full amortization schedule that shows exactly how each payment is split between interest and principal. In the early months of a loan, a much larger portion of your payment goes toward interest. Over time, as your balance decreases, the interest portion shrinks and more goes toward principal.
Example: $25,000 Car Loan at 7.5% for 5 Years
- Monthly payment: $500.75
- Total interest paid: $5,045
- Total cost of loan: $30,045
- First payment: $156.25 interest + $344.50 principal
Types of Loans This Calculator Works For
This calculator can be used for any fixed-rate amortized loan where you make equal periodic payments. Common uses include:
- Personal loans — unsecured loans from banks or online lenders
- Auto loans — car financing from dealerships or credit unions
- Student loans — private and federal student loan repayment estimates
- Business loans — equipment financing and small business term loans
- Home improvement loans — renovation and repair financing
Frequently Asked Questions
What is the difference between APR and interest rate?
The interest rate is the percentage a lender charges on the principal. APR (Annual Percentage Rate) includes the interest rate plus any fees (origination fees, closing costs) expressed as a yearly rate. For an accurate comparison between loan offers, always use the APR rather than just the interest rate.
Can I pay off my loan early?
Most personal and auto loans allow early repayment without penalties, but check your loan agreement. Some lenders charge prepayment penalties. If you can pay extra toward the principal, you'll save on interest and finish the loan faster. Use our extra payment calculator to see the impact.
Is this calculator accurate for variable rate loans?
This calculator is designed for fixed-rate loans. For variable rate loans, the payment amount will change as interest rates fluctuate, so the results serve only as a rough estimate based on the current rate.