How the Loan Calculator Works
This loan calculator shows what a fixed-rate loan will really cost you before you sign. Enter the loan amount, the annual interest rate and the length of the loan in months, and it instantly shows your monthly payment, the total of all payments and the total interest you will pay over the life of the loan.
A full amortization schedule below the results shows how each payment is split between principal and interest and how your balance falls over time. Switch between a yearly summary and a month-by-month view.
It works for most installment loans with equal monthly payments, including personal loans, auto loans, student loan refinancing and debt consolidation loans.
The Loan Payment Formula
Monthly payments are calculated with the standard amortization formula: M = P × r(1 + r)^n ÷ [(1 + r)^n − 1], where P is the amount borrowed, r is the monthly interest rate (the annual rate divided by 12) and n is the total number of monthly payments.
Example: a $20,000 loan at 7% for 5 years (60 payments) works out to about $396 per month. Over five years you would pay about $23,761 in total, which means roughly $3,761 goes to interest.
See How Extra Payments Pay Off Your Loan Faster
Enter an amount in the Extra Monthly Payment box to see how quickly you could be debt-free. The extra amount is added to every payment and goes straight to principal. Each month's interest is then charged on a smaller balance, so more of every later payment also goes to principal.
Example: on the same $20,000 loan at 7% for 60 months, paying an extra $300 per month ($696 in total) pays the loan off in 32 months instead of 60. That is 2 years and 4 months sooner, and it saves about $1,806 in interest. Even an extra $100 per month pays it off 13 months early and saves about $894.
The schedule adds an Extra column so you can watch the balance drop month by month.
Tips for Lowering the Cost of a Loan
- Choose the shortest term you can comfortably afford. Shorter terms mean higher payments but far less total interest.
- Compare the APR, not just the interest rate. APR includes lender fees and is the better comparison number.
- Improve your credit score before applying. Even a 1–2% lower rate can save hundreds or thousands of dollars.
- Make extra principal payments when possible, as long as your loan has no prepayment penalty.
Frequently Asked Questions
How much can I save by making extra loan payments?
It depends on your rate, balance and how much extra you pay, and the savings are largest early in the loan. Enter an amount in the Extra Monthly Payment box to see your new payoff date, the time saved and the interest saved.
Will my lender apply extra payments to principal?
Usually, but not always automatically. Ask your lender to apply extra amounts to principal rather than to future payments, and check that your loan has no prepayment penalty.
Does this loan calculator include fees or insurance?
No. It calculates principal and interest only. Origination fees, insurance and taxes are not included, so check your loan disclosure for the full APR and any added costs.