Loan Calculator
Calculate the monthly payment and total interest for any fixed-rate installment loan.
How to use this calculator
- Enter the amount you plan to borrow.
- Enter the annual interest rate (APR if you know it).
- Enter the term in years and calculate.
The formula
M = P × r(1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)- M
- Monthly payment
- P
- Amount borrowed
- r
- Monthly rate (annual ÷ 12)
- n
- Number of monthly payments
How it works
Installment loans amortize: a fixed monthly payment first covers that month's interest on the remaining balance, and the rest reduces principal.
Because the balance falls every month, the interest portion of each payment shrinks over time while the principal portion grows.
Worked example
A $20,000 auto loan at 8% for 5 years.
- 1r = 8 ÷ 12 ÷ 100 ≈ 0.006667
- 2n = 60
- 3M = 20,000 × 0.006667 × (1.006667)⁶⁰ ÷ ((1.006667)⁶⁰ − 1)
M ≈ $405.53 per month; total interest ≈ $4,331.80.
When this calculator is useful
- Auto loans
- Personal loans
- Comparing lender quotes
- Deciding between term lengths
Frequently asked questions
Is APR the same as the interest rate?
Not exactly. APR includes certain fees, so it is usually slightly higher than the note rate. Entering APR gives a more conservative payment estimate.
What happens if I pay extra each month?
Extra payments reduce principal faster, shortening the loan and cutting total interest. This calculator assumes the scheduled payment only.