Loan Calculator

Calculate your monthly loan payments and total interest

Loan Amount*

Enter the total loan amount

Annual Interest Rate*

Enter the annual interest rate

Loan Term*

Enter the loan term in years

Formula: This calculator uses the standard amortization formula to calculate monthly payments. Actual payments may vary based on additional fees and charges.

How to Use the Loan Calculator

Understanding Loan Payments

When you take out a loan, you'll typically make fixed monthly payments over a set period. These payments include both principal (the amount you borrowed) and interest (the cost of borrowing).

Key Terms

Principal: The original amount borrowed
Interest Rate: The percentage charged on the loan amount annually
Loan Term: The length of time to repay the loan (in years)
Monthly Payment: The fixed amount you pay each month

Tips for Better Loan Terms

Shop around for the best interest rates
Consider making a larger down payment to reduce the loan amount
Choose a shorter loan term if you can afford higher monthly payments to save on interest
Maintain a good credit score to qualify for better rates

Frequently Asked Questions

How is a monthly loan payment calculated?

The standard amortized loan formula is: M = P × (r × (1 + r)ⁿ) ÷ ((1 + r)ⁿ − 1), where P is the principal, r is the monthly interest rate (annual rate ÷ 12), and n is the number of monthly payments. Our calculator applies this formula instantly so you don't have to.

What is loan amortization?

Amortization is the process of paying off a loan with regular equal payments. Each payment covers some interest and some principal. Early on, most of your payment goes toward interest; over time, more goes toward principal until the loan is fully paid off.

Should I choose a longer or shorter loan term?

A shorter term means higher monthly payments but significantly less total interest. A longer term lowers your monthly payment but you pay much more interest overall. Pick the shortest term you can comfortably afford to minimize total cost.

What is the difference between APR and interest rate?

The interest rate is the cost of borrowing the principal. The APR (Annual Percentage Rate) includes the interest rate plus most lender fees, expressed as a yearly percentage. APR is the more honest comparison number when shopping between lenders.

Will making extra payments save me money?

Yes. Any extra principal payment reduces the loan balance immediately, which reduces all future interest charges. Even one extra payment per year on a 30-year mortgage can shave 4–6 years off the loan and save tens of thousands in interest.

What credit score do I need for a good loan rate?

Generally, scores of 740+ get the best rates, 670–739 get good rates, 580–669 get higher rates with more fees, and below 580 may not qualify with most lenders. Improving your score before applying can save thousands over the life of a loan.