Loan Payment Calculator
Find out your monthly payment, total interest, and total cost for any fixed-rate loan.
Calculate Your Loan Payment
What Is a Loan Payment?
A loan payment is the fixed amount you pay each month to repay borrowed money plus the cost of borrowing (interest). With a standard fixed-rate loan, every payment is the same size for the entire term.
Each payment is split into two parts:
- Principal — the portion that reduces the outstanding balance of the loan.
- Interest — the fee the lender charges for use of their money, calculated on the remaining balance.
Early in the loan most of your payment covers interest. Over time the balance decreases, so the interest portion shrinks and more of each payment goes toward principal. This gradual payoff process is called amortization.
Loan Payment Formula
The standard formula for a fixed-rate loan payment is:
When the interest rate is 0%, the formula simplifies to: M = P / n (the loan amount divided evenly across all payments).
Example Loan Calculation
Suppose you take out a $25,000 loan at a 7% annual interest rate for a 5-year term.
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Frequently Asked Questions
What types of loans does this calculator work for?
This calculator works for any fixed-rate, fully amortizing loan, including personal loans, auto loans, and student loans. It assumes equal monthly payments over the entire term. It does not account for variable rates, interest-only periods, or balloon payments.
How does the loan term affect total interest?
A longer loan term lowers your monthly payment but increases the total interest you pay because the balance accrues interest for more months. A shorter term raises monthly payments but saves a significant amount in interest over the life of the loan. Choose the shortest term you can comfortably afford to minimize total cost.
Does this calculator include fees or insurance?
No. This calculator computes principal and interest only. Actual loan costs may include origination fees, closing costs, or required insurance. Check with your lender for a full cost breakdown before committing to a loan.
Compare Mortgage Rates
Even a small difference in interest rates can save you thousands over the life of your loan. Before committing to a mortgage, consider comparing offers from multiple lenders to find the best rate and terms for your financial situation.
What to Look For When Comparing Mortgage Rates
Even a 0.25% difference in your mortgage rate changes your total interest paid by tens of thousands of dollars over a 30-year term. When evaluating lenders, consider these factors alongside the headline rate:
- APR vs. interest rate — the APR includes origination fees and gives a more accurate total-cost comparison across lenders
- Points — paying discount points upfront lowers your rate but extends the break-even period; worthwhile only if you stay in the home long enough
- Fixed vs. adjustable — ARMs start lower but carry rate-reset risk after the initial period; fixed rates offer long-term payment certainty
- Lender type — banks, credit unions, and online lenders each offer different rate structures, underwriting timelines, and service models
- Rate lock period — confirm how long the quoted rate is guaranteed during the underwriting process before you are committed