Loan calculator
A fixed-rate loan has the same payment every month: M = P × i / (1 − (1 + i)^−n), where i is the annual interest rate divided by 12 and n the number of payments. Borrowing $25,000 at 7% for 5 years costs $495.03 a month and $4,701.80 of interest in total.
- Estimate
- How we calculate
Monthly payment
$495.03
- Principal
- $25,000.00
- Total interest
- + $4,701.80
- Total paid
- $29,701.80
Paid off in 5 years. Interest is 16% of everything you pay.
Balance over time
Values in USD · axis in yearsYear 5
- Balance$0
- Interest paid so far$4,702
Chart of the loan balance, from $25,000 down to zero in 5 years, and of the interest paid so far, $4,702 in total. The yearly table below has every value.
Tap, drag or hover over the chart to see each year.
Amortization schedule by year
| Year | Principal | Interest | Balance |
|---|---|---|---|
| 1 | 4,327 | 1,613 | 20,673 |
| 2 | 4,640 | 1,300 | 16,032 |
| 3 | 4,976 | 965 | 11,057 |
| 4 | 5,335 | 605 | 5,721 |
| 5 | 5,721 | 219 | 0 |
Estimate for a fixed-rate loan. Taxes, insurance and lender fees are not included.
Send this to someone
The link opens the tool with the same numbers. No sign-up needed.
Found a mistake? Let us know or write to [email protected]. How we calculate
How the payment is calculated
The monthly rate is the annual interest rate divided by 12. The payment is the same every month and pays the month's interest first; the rest reduces the balance. Early payments are mostly interest, later ones mostly principal. An extra payment goes straight to the principal, so less interest builds up and the loan ends sooner.
M = P·i / (1 − (1 + i)^−n)
M = monthly payment · P = amount borrowed · i = annual interest rate / 12 · n = number of monthly payments
Step by step
- Enter the loan amount. Type how much you borrow, after any down payment or trade-in.
- Enter the rate and term. Use the annual interest rate and the term in years or months, from 1 month to 40 years.
- Add extra payments, if any. Type an extra amount you will pay each month to see how much sooner the loan ends and the interest you save.
- Read the schedule. See the monthly payment, total interest and total paid, the balance chart and the year-by-year amortization table.
Frequently asked questions
How is a monthly loan payment calculated?
Divide the annual rate by 12 to get the monthly rate i, then use M = P × i / (1 − (1 + i)^−n). For $20,000 at 6% over 60 months, i = 0.005 and the payment is $386.66. At 0% the payment is just the amount divided by the months: $10,000 over 12 months is $833.33.
How much interest will I pay on a loan?
Subtract the amount borrowed from the total you pay. $25,000 at 7% for 5 years: $495.03 × 60 = $29,701.80, so $4,701.80 is interest. Stretching the same loan to 6 years lowers the payment to $426.23 but raises the total paid to $30,688.21, so the interest grows to $5,688.21. The calculator keeps the fractions of a cent of each payment, so a total can differ by a few cents from the rounded payment times the number of payments.
How much do extra payments save on a loan?
Every extra dollar goes straight to the principal, so less interest builds up. On a $200,000 loan at 6.5% for 30 years (payment $1,264.14), paying $200 more each month ends the loan in 20 years and 10 months instead of 30 years and saves $90,076.78 of interest. Check first that your lender has no prepayment penalty.
What is an amortization schedule?
It is the table of every payment split into interest and principal, with the balance left after each one. Early payments are mostly interest: in the first year of the $25,000 loan at 7%, $1,612.91 of the payments is interest and $4,327.45 is principal. The yearly table under the calculator shows the whole loan.
Should I enter the interest rate or the APR?
Enter the interest rate to get the exact payment. According to the Consumer Financial Protection Bureau, the APR also reflects points, broker fees and other charges paid to get the loan, so it is usually higher than the rate. Interest is 16% of everything paid on the $25,000 example.
Does the payment include taxes, insurance or fees?
No. It covers principal and interest only. A mortgage payment often also includes property tax and homeowners insurance held in escrow, and some loans add monthly fees. Add those to the result for your real monthly cost.