How to calculate a loan payment
- Enter the amount you're borrowing and the annual interest rate.
- Choose the term, in months or years.
- See the monthly payment, the total interest and the total you'll pay.
- Review the amortization schedule and, if you like, try an extra monthly payment.
How the calculation works
The calculator uses a fixed-payment (annuity) loan: all payments are equal. Each month, part of the payment covers the interest on the balance and the rest reduces the debt, so at the start you pay more interest and at the end more principal. With monthly rate r and n payments, the payment is amount × r ÷ (1 − (1 + r)^−n).
Example: a 100,000 loan at 12% a year over 12 payments has a payment of 8,884.88 and pays about 6,619 in interest in total. A 200,000 loan at 6% a year over 360 payments (30 years) has a payment of 1,199.10 and adds up to about 231,676 in interest: the long term lowers the payment but makes the loan much more expensive.
An extra monthly payment lowers the balance faster: the tool shows how many months and how much interest you save. The schedule can be copied or downloaded as CSV to open in a spreadsheet.
Things to keep in mind
- It's a simulation: it does not include insurance, fees, taxes or adjustments for inflation or indexes.
- Lenders may calculate interest with other conventions (360-day years, effective annual rate, variable payments); the real payment can differ a little.
- With a 0% rate, the payment is the amount divided by the term.
Frequently asked questions
How is a loan payment calculated?
With the fixed-payment formula: amount × r ÷ (1 − (1 + r)^−n), where r is the monthly rate and n the number of payments. The tool does it for you.
Which rate should I enter?
The loan's nominal annual rate, as a percentage. If your lender gives you an effective annual or monthly rate, the payment may differ a little.
What is an amortization schedule?
It's the breakdown of each payment: how much goes to interest, how much to principal and how much is left to pay.
Is it worth making extra payments?
They lower the balance sooner and therefore the total interest. Try it in the extra payment field to see the savings.
Is my data saved?
No. Everything is calculated in your browser and nothing is sent.