How the Loan Calculator works
Calculate loan payments, interest and amortization. Adjust the inputs above, then use the calculate button to generate a fresh estimate based on the numbers you entered.
The result is designed to give you a quick planning number, plus a short breakdown of the major figures behind it. You can reset the form at any time and try a different scenario.
When to use this calculator
Use this loan calculator to estimate a fixed monthly payment before you borrow, refinance or compare loan offers. It works best for installment loans with a set balance, interest rate and repayment term, such as personal loans, auto loans, equipment loans and many business loans.
Formula
Loan payment = P x r(1 + r)^n / ((1 + r)^n - 1)
- P is the amount borrowed.
- r is the monthly interest rate.
- n is the total number of monthly payments.
Worked example
For a $25,000 loan at 8% over 5 years, the calculator estimates the fixed monthly payment, total repayment and total interest. You can then compare a shorter term, lower rate or smaller loan amount to see which change saves the most.
Common mistakes
- Comparing loans by monthly payment only and ignoring total interest.
- Leaving out origination fees, insurance products or other borrowing costs.
- Using an annual rate as if it were a monthly rate.
FAQs
Can I use this for any loan?
It is best for fixed-rate installment loans. Lines of credit, variable-rate loans and interest-only loans may need a more specific calculator.
Why does a shorter term cost less interest?
A shorter term usually pays the balance down faster, so interest has less time to accumulate.
Does the result include fees?
No, unless fees are included in the loan amount you enter. Add fees separately when comparing real offers.