Loan Calculator

How to use the loan calculator

Enter the amount you want to borrow, the yearly interest rate and how long you’ll take to repay. The calculator shows the monthly payment, the total interest and the total you’ll pay back, with a year-by-year schedule. It works for car loans, personal loans, student loans and any other fixed-rate loan with equal monthly payments.

1. Loan amount: the money you borrow, after any deposit or trade-in.
2. Interest rate: the yearly rate from your offer, as a percentage.
3. Term: in years or months.
4. Currency: only changes how amounts are shown; nothing is converted.

Everything is calculated in your browser as you type. Nothing is sent or stored. If you’re comparing offers, keep the calculator open and change one number at a time, such as the rate, then the term, so you can see exactly what each change does to the payment and the total interest.

Reading your results

The large figure is your monthly payment. Below it, three boxes show the amount borrowed, the total interest and the total of all payments. The coloured bar shows how the total splits between principal (blue) and interest (amber), which makes it easy to see how much a loan really costs. Open “Show the year-by-year schedule” to see, for each year, the principal and interest paid and the balance still owed; the balance reaches zero with the final payment.

How the monthly payment is calculated

For a fixed-rate loan with equal monthly payments, the payment M is:

M = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)

• P is the amount borrowed.
• r is the monthly interest rate: the yearly rate ÷ 12 ÷ 100.
• n is the number of monthly payments.

Worked example: $20,000 at 7% a year for 5 years. r = 7 ÷ 12 ÷ 100 = 0.005833…, n = 60. The payment is $396.02 a month. Over 60 months you pay $23,761.44, of which $3,761.44 is interest.

How rate and term change what you pay

The same $20,000 loan, calculated with the formula above. Each cell shows the monthly payment, with the total interest underneath:

Read down a column: a longer term lowers the monthly payment but raises the total interest. Read across a row: every extra percentage point costs more over the life of the loan. The cheapest loan overall is usually the shortest term you can comfortably afford.

The amortization schedule explained

Each payment is split between interest and paying down the balance. Interest is charged on what you still owe, so early payments are mostly interest and later ones mostly principal. In the $20,000 example, the first payment of $396.02 is $116.67 interest (one month at 7% a year: 20,000 × 0.005833) and $279.36 principal. By the last year almost the whole payment reduces the balance.

The calculator’s “Show the year-by-year schedule” lists, for each year, how much principal and interest you pay and the balance left. Need a monthly schedule to download? Ask in plain words: “give me the monthly amortization schedule as a spreadsheet”.

What extra payments do

Paying more than the required amount goes straight to the balance, so less interest builds up afterwards. Example, calculated month by month: on the $20,000 loan at 7% over 5 years, adding $50 to every payment clears the loan in 53 months instead of 60 and cuts the total interest from $3,761.44 to $3,253.02. Check first whether your lender charges a fee for paying early.

Interest rate or APR?

Offers often show two numbers. The interest rate is what you pay to borrow the money. The APR (annual percentage rate) is broader: as the US Consumer Financial Protection Bureau explains, it also reflects points, broker fees and other charges. Use the interest rate in this calculator to see your monthly payment, and compare APRs between lenders to see which loan really costs less.

Car loans: deposit and trade-in

For a car loan, enter the amount you’ll actually borrow: the price minus your deposit and any trade-in value. Example, calculated: a $30,000 car with a $5,000 deposit and a $3,000 trade-in leaves $22,000 to borrow. At 6.9% over 5 years that’s $434.59 a month and $4,075.35 of interest in total. Dealer add-ons, such as extended warranties, raise the amount borrowed if they’re financed, so check the final figure on the agreement.

Personal loans: what to check before you sign

• The APR, not only the interest rate, so fees are included in the comparison.
• Arrangement or origination fees, and whether they’re added to the loan or taken from the money you receive.
• Early repayment terms, in case you want to pay off the loan sooner.
• The total amount repayable, which lenders usually state in the agreement; it should match the calculator closely if there are no extra fees.

Common mistakes with loan calculations

• Using the APR as the interest rate. The APR includes fees, so it slightly overstates the monthly payment; use the interest rate for the payment and the APR to compare offers.
• Mixing years and months. A 60-month loan is 5 years; entering 60 years gives a meaningless result. The calculator lets you choose either unit.
• Forgetting fees that are added to the loan. Include them in the loan amount if they’re financed.
• Assuming a variable rate stays the same. Re-run the numbers at a higher rate to see what you could face.

Which calculator fits your loan?

Ask in plain words

• “What’s the monthly payment on $15,000 at 8.5% for 4 years?”
• “Compare 3 and 5 years on a $25,000 loan at 6.9%.”
• “How much interest do I save if I pay $100 extra a month?”

ToolsMotive uses the same formula and shows its working.

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