Loan Payment Calculator
Enter the loan amount, annual interest rate and term to see your estimated monthly payment, the total interest you will pay, and the true total cost of the loan.
How to use the loan payment calculator
- Type in the total amount you plan to borrow.
- Enter the annual interest rate (APR) quoted by your lender.
- Enter the loan term in years — 3, 5, 7 and 10 years are common for personal and auto loans.
- The results update instantly: monthly payment, total interest, and total cost.
Formula
About this calculator
Almost every installment loan — personal, auto, student, or business — is repaid through amortization: each fixed payment covers the interest accrued that month, and the remainder reduces the balance. Early payments are mostly interest; late payments are mostly principal. This calculator applies the standard amortization formula used by banks.
The interest rate matters far more than most borrowers expect. On a $25,000 loan over 5 years, the difference between 6% and 10% APR is roughly $2,900 in extra interest — for the exact same loan amount. Always compare APR, not the monthly payment, when shopping for a loan, because a longer term can lower the payment while massively raising total cost.
If the numbers look uncomfortable, test two levers: a shorter term and extra principal payments. Even one extra payment per year on a 5-year loan typically removes several months and hundreds of dollars of interest. Use the term field to simulate this rather than guessing.
Frequently asked questions
Does a longer loan term always cost more?
Almost always. A longer term lowers the monthly payment but spreads interest over more months, so the total cost rises. Compare the "Total repaid" figure, not just the monthly payment, before choosing a term.
What is the difference between interest rate and APR?
The interest rate is the cost of borrowing the principal. APR includes the rate plus most lender fees, expressed as a yearly rate. APR is the better number for comparing loan offers.
Do extra payments reduce interest?
Yes — as long as the lender applies them to principal. Every dollar of principal removed early stops accruing interest for the rest of the term, which shortens the loan and cuts total interest.
Is this calculator accurate for credit cards?
Not really. Credit cards use revolving balances with minimum-payment formulas, not fixed amortization. This tool is designed for fixed-term installment loans.