Loan Payment Calculator
Enter your loan amount, annual interest rate, and term in years to see your monthly payment instantly. The calculator uses the standard amortization formula lenders use for mortgages, auto loans, and personal loans, so the figure you get here should match the payment quoted on a fixed-rate loan with monthly payments.
Beyond the monthly number, you also get the total you will pay over the life of the loan, how much of that is interest, and a year-by-year schedule showing principal paid, interest paid, and the remaining balance. That breakdown makes it easy to compare loan offers, test a shorter term, or see how much a lower rate actually saves you before you sign anything.
How it works
A fixed-rate loan is repaid in equal monthly installments. Early payments are mostly interest because the balance is large; as the balance shrinks, more of each payment goes to principal. This calculator computes the fixed payment, then walks through the loan month by month — charging interest on the current balance and applying the rest of the payment to principal — and rolls those months up into a per-year schedule.
Formula
With monthly rate r = annual rate ÷ 1200 and n = years × 12 payments:
M = P × r × (1 + r)n ÷ ((1 + r)n − 1)
where P is the loan amount and M is the monthly payment. If the rate is 0%, the payment is simply P ÷ n. Total interest is the sum of all payments minus the original principal.
Worked example
Take a $200,000 loan at 6% annual interest for 30 years. The monthly rate is 6 ÷ 1200 = 0.005 and there are 360 payments. Plugging in: M = 200,000 × 0.005 × 1.005360 ÷ (1.005360 − 1) ≈ $1,199.10 per month. Over 360 payments you pay about $431,676 in total, of which roughly $231,676 is interest — more than the original loan amount.
This calculator is for informational purposes only, not professional advice. Actual loan payments may differ due to fees, taxes, insurance, or compounding conventions — confirm terms with your lender.
Frequently asked questions
How is a monthly loan payment calculated?
Lenders use the amortization formula M = P × r × (1 + r)^n ÷ ((1 + r)^n − 1), where P is the loan amount, r is the monthly interest rate (annual rate divided by 12), and n is the total number of monthly payments. The result is a fixed payment that covers that month's interest plus enough principal to pay the loan off exactly at the end of the term.
Why is most of my early payment going to interest?
Interest each month is charged on your remaining balance. At the start of the loan the balance is at its largest, so interest eats up most of the fixed payment and only a small slice reduces principal. As the balance falls, the interest portion shrinks and the principal portion grows. The per-year schedule in this calculator shows exactly how that split shifts over time.
How can I lower my monthly loan payment?
The three levers are borrowing less, getting a lower interest rate, and stretching the term over more years. A longer term lowers the monthly payment but raises total interest, because you pay interest for more months. Improving your credit score, adding a larger down payment, or refinancing when rates drop are the most common ways to reduce the rate itself.
Does paying extra each month save interest?
Yes. Any extra amount applied to principal shrinks the balance ahead of schedule, so every future month is charged less interest and the loan ends early. Even modest extra payments compound: on a 30-year loan, an extra $100 a month typically cuts several years off the term. Check that your lender applies extra payments to principal rather than to future installments.
What is the difference between interest rate and APR?
The interest rate is the cost of borrowing the principal and is what this calculator uses to compute your payment. APR, or annual percentage rate, adds required fees such as origination charges and points, expressed as a yearly rate, so it is usually slightly higher. APR is more useful for comparing total loan cost across lenders, while the note rate determines the actual monthly payment.