Loan Calculator
Calculate monthly payments and total interest for any fixed-rate loan.
Inputs
Results
Formula
Where M = monthly payment, P = loan amount, r = monthly interest rate (annual/12), n = total number of payments (years × 12). For zero interest: M = P/n.
Worked Example
When to Use This Calculator
Use this for any fixed-rate loan: auto loans, personal loans, student loans, or business loans. Enter the loan amount, interest rate, and term to see your monthly payment.
Important Assumptions
- Fixed interest rate for the entire term.
- Equal monthly payments (fully amortizing).
- No extra payments, fees, or prepayment penalties.
Common Mistakes to Avoid
- Forgetting that a longer term means lower payments but more total interest.
- Not comparing total cost (principal + interest), only monthly payment.
- Ignoring fees that affect the true cost of borrowing.
Frequently Asked Questions
How is the amortization schedule calculated?
Each month, interest is calculated on the remaining balance. The rest of the payment goes toward principal. Over time, a larger portion goes to principal as the balance decreases.
Why does the final payment differ slightly?
Rounding during the schedule can leave a tiny remaining balance. The final payment is adjusted to bring the balance to exactly zero.
What affects my monthly payment most?
The loan amount has the largest impact, followed by the interest rate, then the term length. Even a small rate change can significantly affect total interest over long terms.