Loan Calculator
Calculate the monthly payment, total payment, and total interest on a fixed-rate loan.
How it works
This calculator finds the fixed monthly payment on a loan — personal, auto, or any other fixed-rate loan — using the standard amortization formula banks use. Each payment is split between interest (which shrinks over time) and principal (which grows over time), even though the total payment stays the same every month.
The formula is M = P × [r(1+r)ⁿ] ÷ [(1+r)ⁿ − 1], where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments (years × 12).
For example, a $20,000 loan at 6.5% APR over 5 years works out to a monthly rate of about 0.542% and 60 payments. Plugging those into the formula gives a monthly payment of roughly $391, for a total of about $23,479 paid — meaning about $3,479 of that is interest.
This tool covers principal and interest only. Real loans often add origination fees, application fees, or optional insurance, so the actual amount you owe a lender may be slightly higher than the pure interest math shown here.
Loan term has an outsized effect on total interest paid: stretching the same loan from 3 years to 6 years lowers the monthly payment but roughly doubles the total interest, since you're paying interest on the remaining balance for twice as long. If your loan allows extra payments toward principal with no prepayment penalty, even small additional payments early on can meaningfully cut the total interest.
Amortization is front-loaded: early payments are mostly interest, and later payments are mostly principal, even though the total payment never changes. On that $20,000 example above, the very first payment is roughly $108 interest and $283 principal, but by the final payment, it flips to almost all principal and barely any interest — because interest is always calculated on whatever balance remains, and that balance shrinks every month.
This calculator applies equally to personal loans, auto loans, or any other fixed-rate installment loan with equal monthly payments — the underlying amortization math is identical regardless of what the loan is for. Loans with different structures, like interest-only loans or loans with balloon payments, would need different math than what's modeled here.
Does this include fees?
No — this covers principal and interest only, not origination fees or insurance.
How does loan term affect total interest paid?
A longer term lowers your monthly payment but increases total interest, because you're paying interest on the outstanding balance for more months. A shorter term raises the monthly payment but reduces total interest paid.
What's the difference between APR and interest rate?
The interest rate is the cost of borrowing the principal. APR (Annual Percentage Rate) also folds in certain fees, giving a more complete picture of the loan's true yearly cost — use APR when comparing offers from different lenders.
Can I pay off a loan early to save on interest?
Usually yes, if there's no prepayment penalty — extra payments applied to principal reduce the balance interest is calculated on, shortening the loan and cutting total interest paid.
How is the monthly payment calculated exactly?
Using the amortization formula M = P[r(1+r)ⁿ]/[(1+r)ⁿ−1], where P is principal, r is the monthly interest rate, and n is the number of monthly payments.
Does a better credit score get me a lower rate?
Generally yes — lenders use credit score as a major factor in the interest rate they offer, since it reflects perceived repayment risk. Shopping multiple lenders is the best way to see your actual options.
Does this assume a fixed or variable interest rate?
Fixed — the calculator assumes the same interest rate for the full loan term, which is how most personal and auto loans work. Variable-rate loans would need to be recalculated if the rate changes.
What is amortization?
Amortization is the process of paying off a loan through regular, equal payments where each payment covers that period's interest plus a portion of the principal — with the interest/principal split shifting over time as the remaining balance shrinks.
Should I always choose the shortest loan term I can afford?
Not necessarily — a shorter term saves on total interest, but it's only a good idea if the higher monthly payment still leaves room for savings and other financial goals. Many borrowers deliberately choose a longer term for payment flexibility, even knowing it costs more in total interest.
How do secured and unsecured loans affect the rate used here?
This calculator just needs whatever rate you've been quoted or are comparing — but for context, secured loans (backed by collateral like a car) typically carry lower rates than unsecured loans (like most personal loans), since the lender has less risk.