How a loan payment is calculated
A fixed-rate loan payment is the amount that, paid every month for the full term, brings the balance to exactly zero. It is calculated from three numbers: the amount borrowed, the annual interest rate, and the number of months in the term.
Each payment is split into two parts: interest on the balance you still owe, and principal that reduces what you owe. Early in the loan most of the payment is interest; later, most is principal. This calculator shows the monthly payment, total interest, and the full payoff date.
Why the monthly payment is not the whole story
A longer term always lowers the monthly payment and raises the total interest. Stretching the same $20,000 loan from five years to seven years might drop the payment from $406 to $312, but it can add more than $1,500 in total interest. When comparing loans, look at the total cost, not just the payment.
Fees and insurance are not included here. A mortgage payment often includes escrow for taxes and insurance; this calculator covers principal and interest only.
How to use this calculator
Enter the amount you plan to borrow — or the balance you still owe on an existing loan — then the annual APR and the term in years. The monthly payment appears instantly, along with the total interest and payoff date.
If you want to see what an extra monthly payment saves, expand the extra payment section. The schedule below shows the first year of payments.
Common mistakes
Entering the sticker price of a car or house instead of the actual loan amount, forgetting to convert a 360-day or 365-day interest rate, and comparing loans by payment rather than total interest. Always use the APR, not the nominal rate, because APR includes most fees.