Finance
Loan Payment Calculator
Estimate loan payments, total interest, extra-payment savings, and payoff time.
Result
Enter your numbers and press Calculate to see the result.
Calculating…
How the loan payment is calculated
The calculator uses the standard amortization formula that banks use for fixed-rate loans. Each monthly payment covers that month's interest on the remaining balance, and the rest reduces the principal — so early payments are interest-heavy and later ones mostly repay the balance. Any fees you enter are financed together with the loan amount.
Formula
M = P × r(1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)
where M is the monthly payment, P the amount borrowed (including fees), r the monthly rate (annual rate ÷ 12 ÷ 100), and n the number of months.
Worked example
A $25,000 loan at 7.5% APR over 5 years (60 months):
- Monthly rate: 7.5 ÷ 12 ÷ 100 = 0.00625
- Monthly payment: ≈ $500.95
- Total paid: ≈ $30,057, of which ≈ $5,057 is interest.
Adding just $100 extra per month pays the same loan off roughly 11 months sooner and saves about $1,000 in interest — the calculator recomputes the payoff schedule month by month to show this.
APR vs. interest rate
The interest rate is the cost of borrowing the principal; the APR (annual percentage rate) folds in lender fees, so it is usually a little higher and is the fairer number when you compare offers. If your loan has origination or processing fees, enter them so the payment and total-cost figures reflect what you will actually pay, not just the headline rate.
Ways to pay less interest
- Shorten the term — a 3-year loan costs more per month than a 5-year one but far less overall.
- Pay extra toward principal — even a small recurring amount shortens the schedule and compounds in your favor, since every dollar of principal removed stops accruing interest for the rest of the term.
- Improve your rate — a stronger credit score or a shorter term typically earns a lower rate; refinancing can help if rates have fallen since you borrowed.
- Avoid rolling fees into the loan — financing fees means you pay interest on them too.
Payment per $1,000 borrowed
Multiply the figure below by the number of thousands you are borrowing to get the monthly payment. It works as a check on any quote you are given, and as a way to price a loan in your head before opening a calculator at all.
| Rate | 3 years | 4 years | 5 years | 10 years | 15 years | 30 years |
|---|---|---|---|---|---|---|
| 3% | $29.08 | $22.13 | $17.97 | $9.66 | $6.91 | $4.22 |
| 4% | $29.52 | $22.58 | $18.42 | $10.12 | $7.40 | $4.77 |
| 5% | $29.97 | $23.03 | $18.87 | $10.61 | $7.91 | $5.37 |
| 6% | $30.42 | $23.49 | $19.33 | $11.10 | $8.44 | $6.00 |
| 7% | $30.88 | $23.95 | $19.80 | $11.61 | $8.99 | $6.65 |
| 8% | $31.34 | $24.41 | $20.28 | $12.13 | $9.56 | $7.34 |
| 9% | $31.80 | $24.89 | $20.76 | $12.67 | $10.14 | $8.05 |
| 10% | $32.27 | $25.36 | $21.25 | $13.22 | $10.75 | $8.78 |
A $18,000 car loan over 5 years at 7%: 18 × $19.80 = $356 a month. Notice how little the rate matters over three years and how much it matters over thirty — at 3% a 30-year loan costs $4.22 per thousand, at 8% it costs $7.34, nearly double for the same debt.
Biweekly payments, and what an extra $50 does
Paying half the monthly amount every two weeks looks identical to paying monthly, and is not: 26 half-payments a year equal 13 monthly payments rather than 12. On a $250,000 loan at 6% over 30 years — $1,499 a month — switching to $749.44 every fortnight clears the balance in about 24.4 years instead of 30.
A flat overpayment works the same way, and it does not take much. Adding $50 a month to that same loan ends it after 330 payments rather than 360 — two and a half years early, and roughly $28,000 less interest. Because amortisation front-loads interest, the earlier the overpayment starts, the more it is worth.
Two things to check before committing: whether the lender charges an early-repayment penalty, and whether extra money is applied to principal rather than held as a prepaid instalment. If it is not applied to principal, none of this happens.
Buying a home? The mortgage calculator adds property tax, insurance, PMI, and HOA on top of the same amortization math.
Loan Payment Calculator — frequently asked questions
How is the monthly loan payment calculated?
It uses the standard amortization formula M = P × r(1+r)^n ÷ ((1+r)^n − 1), where P is the loan amount, r the monthly interest rate, and n the number of months. A $25,000 loan at 7.5% over 5 years costs about $501 per month.
What do extra monthly payments do?
Extra payments go straight to the principal, so interest accrues on a smaller balance each month. This shortens the payoff time and reduces the total interest — the calculator shows both effects.
Why is the total interest so high?
Interest is charged on the remaining balance every month for the whole term. Longer terms mean more months of interest: the same loan over 7 years instead of 5 costs less per month but more in total.
Are loan fees included in the calculation?
Yes. Any origination or processing fees you enter are added to the amount borrowed, so the payment reflects the true financed amount.