Loan Calculator
Calculate monthly payments, total cost, and interest for any personal or business loan.
Work out the monthly payment, total interest, and full repayment cost for any personal, auto, or business loan based on amount, rate, and term.
How Loan Calculator Works
The calculator uses the standard amortizing-loan formula: monthly payment = P × [r(1+r)^n] / [(1+r)^n − 1], where P is the loan amount, r is the annual interest rate divided by 12 (the monthly rate), and n is the total number of monthly payments (term in years × 12).
Every payment is split between interest (based on the remaining balance) and principal (which reduces the balance). Early payments are mostly interest; later payments are mostly principal — this is why total interest looks large on long-term loans even at a modest rate.
Total interest is simply the total of all payments (monthly payment × number of payments) minus the original loan amount.
See It In Action
Who Uses Loan Calculator and Why
- Checking the monthly payment on a personal loan offer before signing, using just the amount, rate, and term the lender quoted.
- Comparing an auto loan and a personal loan for the same amount to see which has the lower total interest cost.
- Estimating how much a business loan will actually cost in total interest over its full repayment term.
- Sanity-checking a lender's advertised monthly payment against the standard amortization math before committing.
Mistakes to Avoid
- Plugging in the lender's advertised APR as if it were the same as a plain interest rate — APR bundles in certain fees, so using it interchangeably with a stated interest rate can slightly overstate or understate the true payment.
- Assuming a longer term is automatically the better deal because the monthly payment is lower — total interest paid rises with a longer term, even though each individual payment shrinks.
- Entering the term in years when the field expects months, or vice versa — since n (loan term in years × 12) drives the whole formula, a mismatched unit throws off both the payment and total interest.
Tips for Best Results
- If your loan offer quotes an APR rather than a plain interest rate, use the APR figure here for a more accurate total-cost estimate, since APR reflects total borrowing cost more closely than a bare interest rate.
- Run the same loan amount at two or three different terms to see exactly how much total interest you're trading for a lower monthly payment.
Fixing Common Problems
My calculated payment doesn't match my loan offer exactly. — Confirm whether your lender quoted a plain interest rate or an APR (which includes certain fees) — using APR in the rate field usually gets you closer to the lender's actual quoted payment.
Terms Explained
APR (Annual Percentage Rate): The interest rate plus certain lender fees, expressed as a yearly rate — a more complete measure of borrowing cost than the plain interest rate alone.
Amortizing loan: A loan repaid through fixed periodic payments, where each payment covers both interest on the remaining balance and a portion of the principal.