Loan Calculator
A low monthly payment can hide a long term and a lot of interest. Before you sign, you need three numbers: what you pay each month, what the loan costs in total, and when it ends. This calculator shows all three, plus what extra payments save you, so you can compare offers on total cost instead of the monthly figure alone.
Enter your numbers
Result
Enter the loan amount, APR, and term below.
The trap in the monthly payment
Dealers and lenders love to talk monthly payment, because it is the number that feels manageable. The number that actually decides whether a loan is a good deal is total interest: the true cost of borrowing. Compare that number across offers, not just the monthly payment.
Extra payments help most early in the loan, when the balance, and therefore the interest, is highest. An extra payment then cuts the balance that every future month’s interest is charged on. And the payoff date, when the loan ends, moves forward with every extra payment. These are the numbers to watch.
What to enter
- Loan amount. The principal, what you borrow before interest.
- APR and term. The annual percentage rate from the offer, and the term in months or years. Auto loans are often 36–72 months; personal loans are often 12–60 months.
- Read the payment, the interest, and the payoff date. All three come back together.
- Try an extra payment. Add a monthly extra payment and see the new payoff date and the interest saved.
We built the extra-payment field for exactly this comparison.
The monthly-payment formula
For a fixed-rate loan with equal monthly payments:
M = P × r × (1 + r)n ÷ ((1 + r)n − 1)
- M = monthly payment
- P = loan amount (principal)
- r = monthly interest rate (APR ÷ 12)
- n = total number of monthly payments
In the U.S., this monthly payment is sometimes called EMI (equated monthly installment) in other countries, it is the same idea: one fixed monthly payment that covers interest plus part of the principal. Amortization is the process of paying the loan down over time. Each payment first covers that month’s interest, and the rest reduces the balance. Early on, most of the payment is interest. Late in the loan, most of it is principal.
A $25,000 car loan, line by line
Auto loan of $25,000, APR 7%, term 60 months (5 years), no extra payments, no fees.
| Step | The math |
|---|---|
| Monthly rate | r = 0.07 ÷ 12 = 0.00583333 |
| Number of payments | n = 60 |
| Growth factor | (1 + r)n = (1.00583333)60 = 1.417625 |
| Monthly payment | M = 25,000 × 0.00583333 × 1.417625 ÷ (1.417625 − 1) = $495.03 |
| Total paid | $495.03 × 60 = $29,701.80 |
| Total interest | $29,701.80 − $25,000 = $4,701.80 |
First payment split: month 1 interest = $25,000 × 0.00583333 = $145.83. Principal paid = $495.03 − $145.83 = $349.20. New balance = $24,650.80. The next month’s interest is charged on that lower balance, which is why the principal share grows over time. All figures rounded to the nearest cent.
Two more loans to compare
Personal loan: $15,000 at 9% APR for 36 months: $477.00 per month, $2,171.86 total interest.
Auto loan: $35,000 at 6% APR for 72 months: $580.05 per month, $6,763.68 total interest. A longer term lowers the payment but raises total interest, so compare it with a 60-month term before choosing.
Extra payment test: on the $25,000 example above, adding $50 a month pays the loan off months early and saves several hundred dollars in interest. The calculator shows the exact figures for your loan.
The fine print
| Assumption | What it means for your result |
|---|---|
| Fixed APR | The rate stays the same for the whole term. Variable-rate loans change. |
| On-time payments | No missed or late payments, no late fees. |
| No fees in the payment | Origination fees, dealer fees, and add-on products are not included unless you add them to the loan amount. |
| Extra payments go to principal | Most lenders apply extra payments to principal, but check yours, some hold them as future payments unless you ask. |
| No prepayment penalty | Most auto and personal loans have none, but confirm before paying early. |
Asked a lot
What happens if I pay extra on my loan?
Extra payments reduce the principal directly, so future interest is charged on a smaller balance. That shortens the loan and cuts total interest. It helps most early in the loan, when the balance, and therefore the interest, is highest.
Should I pick a shorter loan term?
A shorter term means a higher monthly payment but much less total interest. A longer term lowers the payment but costs more overall and leaves you owing more than the car is worth for longer. Pick the shortest term whose payment fits your budget comfortably.
How do I calculate my loan payment?
Use the formula above, or this calculator. You need three inputs: the loan amount, the APR divided by 12 for the monthly rate, and the total number of monthly payments. The result is your fixed monthly payment for a fixed-rate loan.
Is it better to pay extra on the loan principal?
Usually yes, if the loan has no prepayment penalty and you already have an emergency fund. Paying down a high-rate loan is a certain return equal to that rate. But check two things first: that your lender applies extra payments to principal, and that you are not skipping higher-priority debts or savings.
If this wasn’t the one
The Mortgage Calculator runs the same math for a home loan, with taxes, insurance, and PMI. The Compound Interest Calculator shows growth on the savings side of the same formula. The Simple Interest Calculator covers interest on the original amount only, and the Savings Goal Calculator helps you save up instead of borrowing. The Percentage Calculator handles rate differences and payoff percentages. Two guides go deeper: How to Calculate a Loan Payment, and How to Pay Off a Loan Early. Or browse All Finance Calculators and All Calculators.
General information and planning only, not financial, investment, tax, or legal advice. This is not a loan offer or a guarantee of any rate or approval. Loan terms, fees, and penalties vary by lender and loan type, so check the figures with a qualified professional or your lender before you decide.
Sources and further reading
- Consumer Financial Protection Bureau (CFPB), auto loan, personal loan, and amortization guidance.
- U.S. Federal Reserve, general information on loan rates and lending.