Loan Calculator: Monthly Payment & Amortization
Enter the loan amount, annual interest rate and term to instantly see your monthly payment, total interest and a full amortization schedule.
How to use this loan calculator
Type in the amount you plan to borrow, the annual interest rate quoted by your lender and the term in months. Results update as you type. Open the amortization schedule to see how each payment is split between principal and interest.
What drives the cost of a loan?
- Interest rate / APR: even a one-point difference adds up to a large amount over several years.
- Term: longer terms mean smaller payments but more interest overall.
- Fees: origination fees and insurance increase the true cost — that’s why APR matters.
- Your credit score: a stronger score usually unlocks lower rates. See our guide on how to improve your credit score.
Front-loaded interest, explained
With an amortizing loan, early payments are mostly interest because the balance is at its highest. As the balance falls, more of each payment goes to principal. That’s why extra payments made early in the loan save the most money. Learn how to weigh offers in our guide to comparing loans.
Frequently Asked Questions
How is a monthly loan payment calculated?
For a fixed-rate amortizing loan, Payment = P × r / (1 − (1 + r)^−n), where P is the principal, r is the monthly interest rate (APR ÷ 12) and n is the number of monthly payments.
What is the difference between interest rate and APR?
The interest rate is the cost of borrowing the principal. APR (annual percentage rate) also includes certain fees, so it gives a more complete picture of the total cost and is the better number for comparing offers.
Is a longer loan term better?
A longer term lowers the monthly payment but increases the total interest you pay. Choose the shortest term whose payment fits comfortably in your budget.
Does paying extra reduce total interest?
Yes. Extra payments that go toward principal reduce the balance on which interest is charged, which shortens the loan and lowers total interest — check that your lender has no prepayment penalty.
This content is for general information only and is not investment advice. Consider your own situation and consult a licensed professional before making financial decisions.