Loan Payment Calculator

Know the payment before you sign the term

Dealerships and lenders lead with a monthly number because a $389 payment feels smaller than a $18,400 obligation. This loan payment calculator reverses that trick. You enter the amount you borrow, the annual interest rate, and the term in years. You get the monthly principal-and-interest payment, the total you will repay, and how much of that total is interest.

That last figure is the one people skip. A modest rate stretched over many years can cost more than a higher rate paid off quickly. Seeing total interest next to the payment is the fastest way to compare a 36-month car loan with a 72-month loan that “fits the budget.”

How amortization actually works

Each month the lender applies interest to the remaining balance, then the rest of your payment reduces principal. At the start of a long loan, interest eats most of the payment. Near the end, almost everything is principal. The formula that keeps the payment level for the whole term is M = P × r(1+r)^n / ((1+r)^n − 1). Here r is the annual rate divided by 12, and n is years × 12.

If the rate is zero, the formula is just P ÷ n. If you enter a very small rate, the calculator still uses the full formula so rounding stays consistent. Payments are shown as a currency figure; pennies on a real bill may differ by a few cents because servicers use their own day-count and rounding rules.

How to use this calculator

Enter the amount financed—not the sticker price. Subtract a down payment and trade-in, then add amounts you are rolling in, such as an extended warranty, if those will sit on the note. Enter the annual interest rate as a percent (6.75, not 0.0675). Choose a term in years; 5 means 60 monthly payments.

Read three outputs together. The monthly payment tells you cash-flow fit. Total repaid tells you the true price of the purchase. Total interest tells you what you pay for the privilege of spreading the cost. If the interest line makes you uncomfortable, raise the down payment or shorten the term and watch the payment move.

Examples you can sanity-check

A $25,000 auto loan at 7% for five years is about $495 a month, roughly $29,700 repaid, and about $4,700 in interest. Stretch the same loan to seven years and the payment drops, but interest climbs. A $300,000 mortgage at 6.5% for 30 years is about $1,896 a month in principal and interest—before tax and insurance escrow. Over the full term, interest can rival the original principal.

A $12,000 personal loan at 9% for three years lands near $382 a month. If a credit card is charging 22% on the same balance, the personal loan’s interest line is usually the cheaper path, provided you do not borrow more than you need.

What this tool does not include

Origination fees, points, private mortgage insurance, gap insurance, and late fees are outside the formula. Variable-rate loans will not stay on this payment if the index moves. Income-driven student plans are not amortizing consumer loans and should not be modeled here.

Use the take-home pay calculator to see whether the payment is a reasonable share of net income. A common planning guardrail is to keep all debt payments well below a third of take-home pay, but your rent and essentials come first.

Typical examples

Frequently asked questions

What formula does a loan payment use?

The standard amortization formula is M = P × r(1+r)^n / ((1+r)^n − 1), where P is principal, r is the monthly rate, and n is the number of months. A 0% loan is simply principal divided by months.

Does this work for mortgages and car loans?

Yes for the principal-and-interest piece. Mortgages often add escrow for tax and insurance, and auto loans may add warranties. Add those costs on top of the payment this tool shows.

Why is total interest so high on a 30-year loan?

You pay interest on a large balance for a long time. Early payments are mostly interest. A shorter term or extra principal payments cut that total sharply.

Should I enter the APR or the interest rate?

Use the interest rate on the note for the payment formula. APR includes some fees and is better for comparing offers, but it is not the rate inside the amortization equation.

Can I model extra payments?

Not as a separate field in this version. You can approximate the benefit by shortening the term until the payment matches what you actually plan to send each month.