How the Loan Payment Calculator works
Calculate a fixed monthly loan payment. 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 payment calculator when you want a quick estimate of the fixed monthly payment for an installment loan. It is helpful for budgeting before applying or comparing rate and term combinations.
Formula
Payment = principal x monthly rate / (1 - (1 + monthly rate)^(-months))
- Principal is the loan amount.
- Monthly rate is the annual interest rate divided by 12.
- Months is the number of monthly payments in the loan term.
Worked example
For a $30,000 loan at 7.5% over 5 years, the calculator estimates the fixed monthly payment and total repayment.
Common mistakes
- Forgetting that fees may increase the amount borrowed.
- Using the payment estimate as an approval amount.
- Ignoring the total cost of a longer term.
FAQs
What loans does this work for?
It works best for fixed-rate installment loans with equal monthly payments.
Why does the rate affect payment so much?
A higher rate adds more interest to each payment, especially early in the loan.
Can I use months instead of years?
This calculator uses years for the term, so convert months to years when needed.