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Loan Calculator

Calculate monthly loan payments, total interest, and payment schedule for personal loans, auto loans, or any fixed-rate loan.

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How Loan Payments Work

Fixed-rate loans have the same payment every month. Each payment covers interest first, with the remainder going to principal.

Loan Payment Formula

PMT = P × [r(1+r)^n] / [(1+r)^n - 1]

  • PMT: Monthly payment
  • P: Principal (loan amount)
  • r: Monthly interest rate
  • n: Total number of payments

Example: $10,000 Loan at 8% for 5 Years

  • Monthly payment: $202.76
  • Total payments: $12,166
  • Total interest: $2,166

Tips for Better Loan Terms

  • Improve credit score: Higher scores get lower rates
  • Shop around: Compare offers from multiple lenders
  • Consider secured loans: Collateral often means lower rates
  • Make extra payments: Reduces principal faster, saves interest

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Frequently Asked Questions

How is loan payment calculated?

Monthly payment = P × [r(1+r)^n] / [(1+r)^n - 1], where P is principal, r is monthly rate, n is number of payments.

What affects my loan rate?

Credit score, loan amount, loan term, collateral, and current market rates all influence your interest rate.

Should I get a shorter or longer loan term?

Shorter terms have higher payments but lower total interest. Longer terms have lower payments but higher total cost.

Can I pay off a loan early?

Usually yes, but check for prepayment penalties. Paying extra toward principal reduces total interest paid.