What this calculator does
Find out what your monthly payment will be on a loan. Enter how much you borrow, the yearly interest rate and how long you have to pay it back. You'll see the payment, the total interest, the total you repay and the month of your last payment. A table shows how your balance falls year by year.
Most personal loans, car loans, student loans and fixed-rate mortgages are paid back in equal monthly payments. Part of each payment is that month's interest. The rest pays down what you owe. The payment is set so the last one brings your balance to exactly zero. Seeing the whole plan makes it easier to compare offers before you sign.
Where it's used
Why this math matters outside the classroom:
- Personal loans. Borrowing $25,000 at 6% for 5 years costs about $483.32 a month.
- Total cost. Multiplying that payment by 60 months shows the loan costs about $28,999 in all, or about $3,999 in interest.
- Comparing terms. Borrowers compare a 3-year and a 5-year term to weigh a higher payment against lower total interest.
- Business equipment. Small businesses check the monthly payment on equipment financing before signing an agreement.
Grade level and standards: Grades 11–12; Common Core State Standards for Mathematics HSA.SSE.B.4. © Copyright 2010. National Governors Association Center for Best Practices and Council of Chief State School Officers. All rights reserved.
How to use it
- Enter the loan amount: what you actually borrow, after any down payment.
- Enter the yearly interest rate (APR) as a percent.
- Enter how long the loan lasts, in years or months, and the date it starts.
- Read the monthly payment, total interest, total paid and payoff date. Then check the year-by-year table.
What the inputs mean
- Loan amount
- The amount you borrow, also called the principal. It must be more than zero.
- Annual interest rate (APR)
- The yearly rate. The calculator divides it by 12 to get a monthly rate, because interest is charged every month. If the APR you were quoted includes fees, the payment shown may differ slightly from your lender's.
- Loan term
- How long the loan lasts. Years are turned into months and rounded to the nearest whole month, from 1 to 600 months.
- Loan start date
- The date you borrow the money. The first payment is due one month later. So a 5-year loan that starts in October 2026 is paid off in October 2031.
Formula and method
i = APR ÷ 100 ÷ 12 payment = P × i ÷ (1 − (1 + i)^(−n)) at 0% interest: payment = P ÷ n total paid = payment × n; total interest = total paid − P
In the formulas, P is the amount you borrow, i is the monthly interest rate and n is the number of monthly payments. APR is the yearly rate. The payment formula is a standard one. It finds the one monthly amount that pays off the loan, with interest, in exactly n payments.
Each month, the interest is what you still owe times i. The rest of the payment lowers your balance. You owe the most at the start, so interest takes a bigger bite of the first payments. After that, a little more goes to the loan itself every month.
Worked example
You borrow $25,000 at 6.9% APR for 5 years.
- Monthly rate: 6.9% ÷ 12 = 0.575%, or 0.00575.
- Number of payments: 5 × 12 = 60.
- Payment: $25,000 × 0.00575 ÷ (1 − 1.00575^(−60)) ≈ $493.85.
- Total paid: $493.85 × 60 ≈ $29,631.08, so total interest ≈ $4,631.08.
Result: The monthly payment is about $493.85. In the first month, $143.75 of it is interest. By the end of the first year, you owe about $20,663.34. A loan that starts on October 18, 2026 makes its last payment in October 2031.
Understanding the result
The monthly payment covers only the loan itself: principal (the amount borrowed) and interest. Your real bill may be higher once insurance, taxes or other charges are added.
A longer loan lowers the monthly payment but raises the total interest, because you owe money for longer.
Assumptions and limitations
- The rate stays the same for the whole loan.
- You pay once a month, at the end of each month, starting one month after the loan begins.
- The APR is treated as a stated yearly rate divided by 12. No other way of compounding interest is used.
- Setup (origination) fees, insurance, property taxes and other charges aren't included.
- Payments aren't rounded to the cent. So the small change lenders usually make to the last payment isn't shown.
- It doesn't handle loans whose rate changes, interest-only periods, balloon payments or extra payments. The extra payment calculator shows what paying more does.
- Lenders may charge interest daily or round payments differently, so their figures can differ slightly.
- Results are estimates. Check the payment schedule and total cost with your lender before you sign.
Frequently asked questions
Why is so much of each early payment interest?
Interest is charged on what you still owe, and that's highest at the start. As your balance falls, the interest part shrinks and more of each payment goes to the loan itself.
How much does a shorter term save?
A shorter loan means higher payments but less total interest. Try the same amount and rate with different terms. Then compare the total interest to see the trade-off for your loan.
Is APR the same as the interest rate?
Not always. The interest rate is the cost of borrowing the money. An APR (annual percentage rate) may also include certain fees. This calculator treats the number you enter as the yearly interest rate on your balance.
Does this include taxes and insurance?
No. The payment shown covers principal and interest only. For a mortgage or a financed car, add property taxes, insurance and any other required charges to get your full monthly cost.
How much can I borrow for a given monthly payment?
Turn the formula around: loan = payment × (1 − (1 + i)^−n) ÷ i. At 6.9% for 5 years, a $400 monthly budget covers about $20,249. You can also pick Solve for on the loan amount and enter the payment you want.
How do I compare two loan offers?
Enter each offer's amount, rate and term in turn. Compare the total paid, not just the monthly payment. A lower payment from a longer loan often costs more overall. Also add any upfront fees to each offer's total.
What happens with a 0% loan?
With no interest, the payment is the loan amount divided by the number of months. $1,200 over 12 months is $100 a month.
How this calculator is checked
Method: Standard annuity (level-payment amortization) formula with monthly rate = APR ÷ 12. The calculation is covered by automated tests with known reference values and edge cases. Last updated 2026-10-18. Found a problem? Tell us.
Embed this calculator
Put this Loan Payment Calculator on your own website or blog for free. Paste this code where you want it to appear: