Loan Payment Calculator

Enter the loan amount, rate, and term - see monthly payment and total interest instantly.

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Monthly payment
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Total paid
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Total interest

A loan calculator turns three numbers - the amount you borrow, the annual interest rate, and the term in years - into the monthly payment you'd actually owe. It's the same math banks use, so the figure you see here will closely match a real lender's quote (give or take taxes, fees, and insurance). Use it to compare offers, test affordability before applying, or see how a different rate or term changes the long-run cost of borrowing.

How this calculator works

Every fixed-rate amortizing loan - mortgage, car, student, personal - follows the same formula. It's called the PMT formula:

M = P × [ r(1+r)n ] / [ (1+r)n − 1 ]
  • M - monthly payment (what we solve for)
  • P - principal, the amount you borrow
  • r - monthly interest rate, equal to the annual rate divided by 12 (so 6% annual is 0.005 per month)
  • n - total number of monthly payments, equal to years × 12 (a 30-year loan is 360 payments)

The formula assumes equal monthly payments and a fixed rate for the full term. Each payment splits between interest (charged on the remaining balance) and principal (which reduces the balance). Early on the split is mostly interest because the balance is high; near the end it's mostly principal. That changing split is called amortization.

Worked example. Borrow $250,000 at 5% for 30 years. Monthly rate r = 0.05 / 12 ≈ 0.004167. Term n = 360 months. Plug in: M ≈ $1,342. Total paid over 30 years ≈ $483,000. Total interest ≈ $233,000 - almost as much as the original loan.

Real-world scenarios
Mortgage: $400k house with 20% down

Loan amount $320,000, 30 years, 6.5% rate. Monthly P&I ≈ $2,022. Total interest over the life of the loan ≈ $408,000 - more than the original loan. Add taxes and insurance and the real housing cost is closer to $2,800/month.

Car loan: $35,000 over 5 years

At a 7.5% rate, monthly payment ≈ $702. Total interest ≈ $7,100. Stretching to 7 years drops the payment to about $539 but adds nearly $3,000 of total interest - a typical car-loan trap.

15-year vs 30-year on the same loan

$300,000 at 6% on a 30-year term: $1,799/month, $347,500 in interest. The same loan over 15 years: $2,532/month, only $155,700 in interest. The shorter term saves about $192,000 in exchange for a $733/month higher payment.

Student loan: $50,000 over 10 years

At a 6% rate, monthly payment ≈ $555. Total interest ≈ $16,600. A 1% rate cut (refinancing to 5%) saves about $3,000 over the term - worth checking when rates drop.

Frequently asked questions
How is a monthly loan payment calculated?
Monthly payment uses the standard PMT formula: P × [r(1+r)n] / [(1+r)n − 1], where P is the principal (the loan amount), r is the monthly interest rate (annual rate divided by 12), and n is the total number of monthly payments (years × 12). The same formula is what banks, mortgage brokers, and spreadsheets use.
What is the monthly payment on a $200,000 loan at 4% for 30 years?
A $200,000 loan at 4% annual interest over 30 years works out to a monthly payment of about $954.83. Over the full term, you'd pay roughly $143,739 in interest on top of the $200,000 principal - a total of about $343,739.
How does the interest rate affect monthly payments?
A higher interest rate raises both the monthly payment and the total interest paid. On a $200,000 30-year loan, a rate increase from 4% to 6% raises the monthly payment from about $955 to about $1,199 - and adds roughly $87,000 in total interest over the life of the loan. Even a 0.5% rate change is significant on long-term loans.
What is amortization?
Amortization is the process of paying off a loan through regular equal payments. Each payment is split between interest and principal, but the split changes over time: early payments are mostly interest, later payments are mostly principal. By the final payment, the balance is zero.
Does this calculator include taxes and insurance?
No. This shows principal and interest (P&I) only. For a mortgage, the actual monthly bill (PITI) usually also includes property taxes, homeowner's insurance, and possibly PMI. Add those separately if you want a true monthly housing cost - they often add 25–40% on top of P&I.
Is it better to take a 15-year or 30-year mortgage?
A 15-year loan has a higher monthly payment but dramatically less total interest. On a $300,000 loan at 6%, a 30-year term costs about $1,799/month and roughly $347,500 in total interest. A 15-year term costs about $2,532/month but only about $155,700 in interest - saving you nearly $192,000. The trade-off is monthly cash flow vs. long-run cost.
How does making extra payments affect a loan?
Extra principal payments shorten the loan term and reduce total interest paid, often dramatically. Even an extra $100 per month on a 30-year mortgage can shave 4–6 years off the loan. This calculator doesn't model extra payments directly, but you can re-run it with a shorter term to see the equivalent effect.
What's the difference between APR and the interest rate?
The interest rate is what you pay on the principal. APR (Annual Percentage Rate) includes the interest rate plus most loan fees (origination, points, mortgage insurance) expressed as an annual percentage - so APR is always equal to or higher than the interest rate. For comparing loan offers honestly, APR is the more useful number.
Does the calculator work for car loans, student loans, and personal loans?
Yes. The PMT formula is the same for any fixed-rate amortizing loan - mortgage, auto, personal, or student. Just plug in the amount borrowed, the annual interest rate, and the term in years. For loans denominated in months (common for car loans), divide the months by 12 to get years.
How accurate is this calculator?
The math is precise - it uses the same PMT formula banks use. Real-world payments may differ by a few cents to a few dollars due to rounding rules, daily-interest accrual on some loans, or fees rolled into payments. For shopping and budgeting, this is more than accurate enough.

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