Loan Calculator
Calculate payments for any fixed-term loan. See the Total Interest cost and plan your payoff strategy.
Loan Details
Monthly Payment
Loan Summary
A loan is a financial tool that allows you to buy something now and pay for it later. The "price" of this service is Interest. This calculator helps you understand exactly how expensive that price is over the life of the loan.
Car dealers and lenders love to focus on the "Monthly Payment." They can lower this payment simply by extending the loan term to 7 or 8 years. While your monthly bill drops, you end up paying thousands more in total interest.
Understanding Amortization
Most loans are "front-loaded." This means in the first few years, a huge chunk of your monthly payment goes purely to interest, not to paying down the debt.
Year 1 Payment Breakdown
At the start, you barely make a dent in the balance.
Final Year Payment Breakdown
By the end, almost 100% of your money goes to clearing the debt.
Debt Payoff Strategies
The "One Extra Payment" Hack
By making just **one extra payment per year** applied to the principal, you can shave years off a 30-year mortgage and save tens of thousands in interest.
Specific Loan Types
Looking for a specific type of loan? We have specialized calculators that factor in taxes, fees, and trade-in values.
The Math: Amortization Formula
Banks use the standard Amortization Formula to ensure your fixed monthly payment pays off the loan exactly at the end of the term.
- A: Monthly Payment Amount
- P: Principal (Loan Amount)
- r: Monthly Interest Rate (Annual Rate / 12)
- n: Total Number of Payments (Months)
Term Length Impact ($20,000 Loan at 6%)
See how extending your loan term lowers monthly payments but explodes total interest.
| Loan Term | Monthly Payment | Total Interest Paid | Total Cost |
|---|---|---|---|
| 3 Years (36 mo) | $608 | $1,904 | $21,904 |
| 5 Years (60 mo) | $387 | $3,199 | $23,199 |
| 7 Years (84 mo) | $292 | $4,539 | $24,539 |
By choosing the 7-year loan to "save" $95/month, you pay an extra $1,300+ in interest.
Related Tools
Does paying extra actually save money?
Yes! Because interest is calculated on the remaining balance, every extra dollar you pay directly reduces the Principal. This lowers the interest charged next month and shortens the total loan term.
What is the difference between APR and Interest Rate?
The Interest Rate is the cost of borrowing the money. The APR (Annual Percentage Rate) includes the interest rate PLUS any fees (origination fees, closing costs). APR is the truer measure of loan cost.
Should I choose a longer or shorter loan term?
A shorter term (e.g., 3 years vs 5 years) has higher monthly payments but saves you a massive amount in total interest. Always choose the shortest term you can comfortably afford.
What happens if I miss a payment?
You will likely be charged a late fee. If you are more than 30 days late, it may be reported to credit bureaus, significantly damaging your credit score.
Can I pay off my loan early?
Usually, yes. However, check your loan agreement for 'Prepayment Penalties.' Most modern consumer loans do not have them, but it is critical to verify.
Loan Terms
Principal
The original amount of money you borrowed. This does not include interest.
Term
The lifespan of the loan. Common terms are 36, 48, 60 months for cars, or 15, 30 years for houses.
APR
Annual Percentage Rate. A broader measure of cost that includes both the interest rate and any lender fees.
Secured Loan
A loan backed by collateral (like a car or house). If you don't pay, they can take the asset. These usually have lower rates.
About This Calculator
This Loan Calculator uses the standard industry formula for fixed-rate installment loans. It assumes interest is compounded monthly. It does not account for variable rates or loans that calculate interest daily (Simple Interest), though for most consumer loans, the difference is negligible.