Loan Payment Calculator

How it works

A fixed-rate loan with equal monthly payments — a mortgage, auto loan, or personal loan — is called an amortizing loan. Every payment is the same size for the whole term, but the mix inside it changes: early payments are mostly interest, later payments are mostly principal. The monthly payment is found with the standard annuity formula:

M = P × r × (1 + r)^n / ((1 + r)^n − 1)

where P is the loan amount, r is the monthly interest rate (the annual rate divided by 12), and n is the number of monthly payments. This is the same formula banks and lenders use to quote a fixed-rate loan; it isn't specific to any country's regulation, just how compound interest works when a debt is paid off in equal installments.

The raw result of this formula is rarely a round number of cents, so it has to be rounded somewhere. This calculator rounds the monthly payment up to the next cent rather than to the nearest cent. That's a deliberate choice: the unrounded payment is the exact minimum that pays off the loan in precisely n payments. Rounding down would leave a small balance still owed after the final scheduled payment — technically under-paying the loan. Rounding up guarantees the loan is fully paid off by the last row of the schedule, with nothing left over.

The amortization schedule breaks each payment into an interest portion and a principal portion. Each month, interest is charged on whatever balance is still outstanding (balance × monthly rate), and the rest of the fixed payment goes toward reducing the principal. Because the balance is largest at the start of the loan, the interest portion is largest there too — for a typical multi-year loan, the first payments are weighted heavily toward interest, and the split gradually flips so the final payments are almost entirely principal. This is why paying off a loan early saves more interest than the "average" monthly interest figure might suggest: you're skipping the higher-interest payments still ahead of you, not the lower-interest ones you've already made.

If the interest rate is 0% — for example, a 0% promotional financing offer — the formula above doesn't apply (it would divide by zero), so the calculator simply splits the loan amount evenly across the term instead.

Examples

A $10,000 loan at a 6% annual rate over 36 months (3 years) has a monthly rate of 6% / 12 = 0.5%. Working through the annuity formula gives a monthly payment of $304.22. Over 36 payments, that's a total of $10,951.92 paid back, of which $951.92 is interest — roughly 8.7% of the total amount repaid.

Looking at the amortization schedule for that same loan, the first payment's interest portion is $10,000 × 0.5% = $50.00, so $254.22 of that first $304.22 payment goes toward principal. By the last payment, the remaining balance is small enough that almost the entire $304.22 is principal and only a few cents are interest.

Things to watch for

• This calculator is for fixed-rate, fixed-term, fully amortizing loans — every payment is the same size for the whole term. It doesn't model variable or adjustable-rate loans, interest-only periods, or balloon payments where a large lump sum is due at the end; those need a different calculation entirely.
• A real loan offer usually isn't just the interest rate. Lenders commonly add origination fees, processing charges, or required insurance on top of the numbers shown here, which raise the true cost of borrowing above what this calculator computes from principal, rate, and term alone.
• Making extra payments toward principal reduces future interest, because interest is always charged on the current outstanding balance — paying down that balance faster means every later month is charged interest on a smaller amount. This calculator only shows the schedule for the payments as originally set; it doesn't have a field for extra, one-off payments.
• This is general information, not financial advice. See our Disclaimer page for more on this.
• Everything runs in your browser. The numbers you enter are never sent to a server; the calculation happens locally on your device.

If you're comparing this loan to how a lump sum would grow instead, the Compound Interest Calculator shows how a one-time investment grows over time. For a plain percentage calculation unrelated to a loan, the Percentage Calculator covers percent-of, percentage change, and increase/decrease.