Loan Calculator
Estimate your monthly payments for personal, auto, or business loans.
Instantly estimate your monthly loan payments and total interest costs. Perfect for Personal Loans, Auto Loans, and Business Loans.
Loan Details
Monthly Payment
Loan Summary
What is Loan Calculator?
Understanding the Loan Calculator
A loan calculator is an essential financial tool designed to demystify the cost of borrowing money. By inputting three simple variables—loan amount, interest rate, and term—it reveals exactly how much you will pay each month and, more importantly, how much the loan will cost you in total interest.
Who Should Use This?
- Car Buyers: To compare monthly payments on 36, 48, or 60-month auto loans.
- Debt Consolidators: To see if a personal loan has a lower monthly cost than your current credit card bills.
- Small Business Owners: To calculate repayment schedules for startup capital or equipment financing.
- Students: To estimate future payments on private student loans.
Why This Tool is Useful
Lenders often focus on the "Monthly Payment" to make loans seem affordable (e.g., "Only $199/month!"). However, this often masks high interest rates or extremely long terms that double the cost of the item. This calculator exposes the Total Interest and Total Cost, empowering you to make smarter financial decisions.
When to Use It
Use this calculator BEFORE you visit a dealership or bank. Knowing your numbers beforehand gives you negotiating power and prevents you from agreeing to hidden terms that blow up your budget.
How to Use This Calculator
Getting an accurate estimate is simple:
- Enter Loan Amount: The exact amount of money you intend to borrow (Principal). Do not include your down payment here. (Range: $500 - $1M)
- Input Annual Interest Rate: The Annual Percentage Rate (APR) offered by the lender. Rates vary by credit score. (Typical: 5% - 36%)
- Select Loan Term: How many years you will take to pay it back. Longer terms lower the monthly payment but increase total interest.
Common Mistakes to Avoid
- Ignoring the APR: The interest rate isn't the only cost. Ensure you input the APR, which includes fees.
- Stretching the Term: Opting for a 7-year car loan might lower payments, but you'll likely owe more than the car is worth ("underwater") for years.
- Forgetting Origination Fees: Many personal loans charge a 1-5% fee upfront. Subtract this from your Loan Amount input to see what you actually pocket, or add it to see the full cost.
Formula & Calculation
Loans use the standard amortization formula to determine a fixed monthly payment that pays off both interest and principal over the set term.
Where:
- M = Total Monthly Payment
- P = Principal Loan Amount
- i = Monthly Interest Rate (Annual Rate ÷ 12)
- n = Total Number of Months (Years × 12)
Example Calculation
Real-World Calculation Examples
Example 1: The Wedding Loan
Scenario: You need $10,000 to cover wedding expenses. Your credit union offers a 3-year personal loan at 8% APR.
i = 0.08 / 12 = 0.00666
n = 3 * 12 = 36
Result: Your payment is $313.36/month. Over 3 years, you pay $1,281 in interest. Total cost: $11,281.
Example 2: The New Car
Scenario: Buying a $35,000 car. You put $5,000 down and finance $30,000. Dealer offers 5% for 5 years (60 months).
Result: Monthly payment: $566.14. Total Interest: $3,968. If you extended this to 7 years to lower payment to $425, total interest would jump to $5,600.
Explanation of Results
- Monthly Payment: The mandatory amount due each month. Missing this damages your credit score.
- Total Interest: The "profit" the bank makes from you. Use this number to compare different loan offers.
- Total Repayment: The sum of Principal + Interest. This is the true price of the item you are buying on credit.
Reference Tables
Loan Amortization Overview
See how the loan term affects your monthly payment and total interest for a $10,000 loan.
| Interest Rate | Term | Monthly Pay | Total Interest |
|---|---|---|---|
| 5% | 3 Years | $300 | $790 |
| 5% | 5 Years | $189 | $1,323 |
| 10% | 3 Years | $323 | $1,616 |
| 10% | 5 Years | $212 | $2,748 |
| 20% (Credit Card) | 3 Years | $372 | $3,379 |
Why use this calculator?
- Financial Clarity: Don't guess. Know exactly what you can afford before applying.
- Negotiation Tool: Use the calculated interest / total cost to negotiate better rates with lenders.
- Scenario Planning: Run "What If" scenarios (e.g., "What if I pay $50 extra a month?") to see savings.
Frequently Asked Questions
Frequently Asked Questions
How does my credit score affect my loan?
Your credit score is the #1 factor in determining your interest rate. Excellent scores (720+) get the lowest rates (e.g., 5-7%). Poor scores (<600) may see rates of 20-30% or rejection. A higher score signifies lower risk to the lender.
Can I pay off my loan early?
Yes, mostly. Paying off a loan early saves you money on interest. However, check your loan agreement for a Prepayment Penalty—a fee charged for paying early. Avoid loans with this clause if possible.
What is the difference between Secured and Unsecured loans?
A Secured Loan requires collateral (like a car or home) that the lender can seize if you don't pay. They typically have lower rates. An Unsecured Loan (like a personal loan) requires no collateral but has higher rates because the lender takes more risk.
Does checking my rate hurt my credit score?
It depends. Getting a "pre-qualification" usually involves a Soft Pull, which does NOT hurt your score. Applying for the actual loan triggers a Hard Pull, which may drop your score by a few points temporarily.
Key Terms & Definitions
Disclaimer: This calculator is for educational purposes only. Results are estimates and may specific loan terms offered by your lender. Always consult with a financial advisor before taking on debt.
Last Updated: January 2026