Loan Calculator
Calculate monthly payments, total interest, and total cost on personal loans.
Amortization Schedule
| # | Payment | Principal | Interest | Balance |
|---|---|---|---|---|
| 1 | $188.71 | $147.05 | $41.67 | $9,852.95 |
| 2 | $188.71 | $147.66 | $41.05 | $9,705.30 |
| 3 | $188.71 | $148.27 | $40.44 | $9,557.02 |
| 4 | $188.71 | $148.89 | $39.82 | $9,408.13 |
| 5 | $188.71 | $149.51 | $39.20 | $9,258.62 |
| 6 | $188.71 | $150.13 | $38.58 | $9,108.48 |
| 7 | $188.71 | $150.76 | $37.95 | $8,957.72 |
| 8 | $188.71 | $151.39 | $37.32 | $8,806.34 |
| 9 | $188.71 | $152.02 | $36.69 | $8,654.32 |
| 10 | $188.71 | $152.65 | $36.06 | $8,501.66 |
| 11 | $188.71 | $153.29 | $35.42 | $8,348.37 |
| 12 | $188.71 | $153.93 | $34.78 | $8,194.45 |
| 13 | $188.71 | $154.57 | $34.14 | $8,039.88 |
| 14 | $188.71 | $155.21 | $33.50 | $7,884.67 |
| 15 | $188.71 | $155.86 | $32.85 | $7,728.81 |
| 16 | $188.71 | $156.51 | $32.20 | $7,572.30 |
| 17 | $188.71 | $157.16 | $31.55 | $7,415.14 |
| 18 | $188.71 | $157.82 | $30.90 | $7,257.32 |
| 19 | $188.71 | $158.47 | $30.24 | $7,098.85 |
| 20 | $188.71 | $159.13 | $29.58 | $6,939.71 |
| 21 | $188.71 | $159.80 | $28.92 | $6,779.92 |
| 22 | $188.71 | $160.46 | $28.25 | $6,619.45 |
| 23 | $188.71 | $161.13 | $27.58 | $6,458.32 |
| 24 | $188.71 | $161.80 | $26.91 | $6,296.52 |
How It Works
- 1
Enter loan details
Input the loan amount, annual interest rate, and loan term in years.
- 2
Review payment breakdown
See monthly payment, total interest, and total amount you'll pay back.
- 3
Compare loan options
Adjust rate or term to compare scenarios. Shorter terms mean higher payments but less total interest.
Worked example: $15,000 at 7% for 5 years
A $15,000 personal loan at a 7% fixed annual rate, repaid in equal monthly installments over 5 years with no extra payments.
- Monthly rate r = 7% Γ· 12 = 0.0058333.
- Number of payments n = 5 Γ 12 = 60.
- M = 15,000 Γ 0.0058333 Γ 1.0058333βΆβ° Γ· (1.0058333βΆβ° β 1) β $297.02.
- First payment split: interest = 15,000 Γ 0.0058333 = $87.50, principal β $209.52.
- Total paid over 60 months β $17,821, of which β $2,821 is interest.
Monthly payment β $297.02. Total interest β $2,821 if you make only the scheduled payments.
Loan payment formula
M = P Γ r Γ (1 + r)βΏ Γ· ((1 + r)βΏ β 1)
- M
- fixed monthly payment (principal + interest)
- P
- loan principal (amount borrowed)
- r
- monthly interest rate (annual rate Γ· 12)
- n
- number of monthly payments (years Γ 12)
This is the same amortization formula used for fixed-rate mortgages, applied to shorter personal, auto, and student loan terms. Extra monthly payments cut principal early and shrink total interest.
Monthly payment per $10,000 borrowed
| Annual rate | 3-year term | 5-year term |
|---|---|---|
| 5.0% | $299.71 | $188.71 |
| 7.0% | $308.77 | $198.01 |
| 10.0% | $322.67 | $212.47 |
| 12.0% | $332.14 | $222.44 |
Understanding Loan Payments
Personal loans, auto loans, and student loans all use the same amortization formula as mortgages: Monthly Payment = P Γ [r(1+r)^n] / [(1+r)^n β 1]. What makes loan math worth understanding is how much interest rate and term length swing the total cost. A $20,000 auto loan at 5% for 5 years costs $2,645 in total interest. Extending to 7 years drops the payment but raises total interest to $3,761, a 42% increase. Higher rates amplify this: at 10% for 5 years, total interest is $5,496, more than double. Our calculator shows monthly payment, total interest, and total amount paid.
Common pitfalls
Simple-interest auto loans accrue interest daily, not monthly. Paying 10 days early on a $25,000 loan at 7% saves roughly $48 in interest; paying 10 days late costs about the same. Amortized mortgages use fixed monthly periods, so timing affects the total less.
Rule of 78s (sum-of-digits) prepayment penalties still exist on some subprime loans of 60 months or less (federal law 15 USC Β§1615 bars it on longer-term consumer refinancings). The formula front-loads the interest, so paying a 48-month loan off halfway through does not save half the interest. Check the contract for 'Rule of 78' or 'sum-of-digits' language before signing.
0% financing often hides a non-discounted sticker price. A $30,000 car at 0% over 60 months can cost $2,000-$3,000 more than the same car negotiated for cash. Ask for the cash price first, then decide if the 0% loan beats it.
Payment-focused shopping hides total cost. 'Just $299/month' on a 72-month auto loan at 8% is a $17,800 car plus roughly $4,000 in interest. Shop total loan cost, not monthly payment, and watch the term length.
Adjustable-rate personal loans can reset well above the intro rate. A 3-year fixed at 9% that converts to prime + 6% jumps to around 14% when prime is 8%. On a $15,000 balance with a few years left, each 1-point rate increase adds roughly $8/month, so a 5-point jump from 9% to 14% piles on about $40-$50/month.
Frequently Asked Questions
How is a loan payment calculated?
Monthly payment is calculated using the amortization formula: P Γ [r(1+r)^n] / [(1+r)^n - 1], where P is the principal, r is the monthly interest rate, and n is the total number of months.
What is the difference between a loan and a mortgage?
A mortgage is a specific type of loan secured by real estate. Personal loans are typically unsecured, have shorter terms (1-7 years), and carry higher interest rates than mortgages (15-30 years).
How does interest rate affect total cost?
Higher interest rates raise total cost sharply. For example, a $10,000 loan at 5% for 5 years costs $1,323 in interest, while the same loan at 10% costs $2,748, more than double.
What is the difference between interest rate and APR?
The interest rate is the cost of borrowing as a percentage of principal. APR (annual percentage rate) folds in most lender fees and expresses the yearly cost of credit, so two loans with the same rate can have different APRs. Compare APRs when shopping; use the rate in the amortization formula for payment math.
How much do extra payments save on a personal loan?
Any amount above the scheduled payment goes straight to principal. On a $15,000 loan at 7% for 5 years, an extra $50 per month cuts total interest by hundreds of dollars and shortens the term by many months. The calculator shows interest savings and months saved when you enter an extra payment.
Is a personal loan cheaper than a mortgage?
Usually no. Mortgages are secured by the home and typically run 15β30 years at lower rates. Personal loans are often unsecured, last 1β7 years, and carry higher rates. Use the mortgage calculator for home financing and this loan calculator for personal, auto, or student balances.
Related Reading
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