How is a monthly loan payment calculated?

The formula is: M = P × [r(1+r)^n] / [(1+r)^n – 1], where P is the principal, r is the monthly rate (annual rate ÷ 12), and n is the number of payments. This assumes a fixed rate and equal monthly payments throughout the loan term.

What is amortization?

Amortization is the process of paying off a loan through regular scheduled payments. Each payment covers both interest and principal. Early in the loan, most of each payment goes toward interest; later payments are mostly principal. The amortization schedule shows exactly how each payment is split.

Should I choose a shorter or longer loan term?

Shorter terms mean higher monthly payments but significantly less total interest paid. For example, a 15-year mortgage typically saves over $100,000 in interest compared to a 30-year mortgage at the same rate. Choose based on your monthly cash flow vs. long-term cost priorities.

What is the difference between APR and interest rate?

The interest rate is the base cost of borrowing. APR (Annual Percentage Rate) includes the interest rate plus fees and closing costs, making it a more complete picture of the loan's true cost. When comparing loans, use APR. This calculator uses the stated interest rate only.

How much does a higher interest rate cost over time?

Significantly. On a $300,000 30-year mortgage, the difference between 6% and 7% APR adds roughly $68,000 in total interest. Even a 0.5% difference matters enormously over a long term — use the calculator to compare scenarios.

Loan Calculator

Calculate monthly loan payments, total interest, and see a full amortization breakdown for any mortgage, car loan, or personal loan.

Loan Amount

Annual Interest Rate

Loan Term

Enter loan amount, interest rate, and term to calculate your monthly payment.

How to Use

Calculate monthly loan payments, total interest, and see a full amortization breakdown for any mortgage, car loan, or personal loan.

1Enter the loan amount in the first field — this is the principal you are borrowing, without any down payment already made.
2Enter the annual interest rate as a percentage. For example, type 6.5 for a 6.5% APR loan.
3Enter the loan term and choose whether you are entering it in years or months using the toggle buttons.
4The monthly payment appears instantly in the large result card at the top. Below it, you can see the total amount repaid and total interest paid.
5Scroll down to the amortization table to see the first 12 months of payments broken down by principal and interest — notice how the interest portion decreases each month.

Key Features

Instant monthly payment calculation — see your payment update live as you adjust amount, rate, or term
Years or months toggle — enter loan term in whatever unit is most natural for your loan type
Principal vs. interest breakdown bar — visual split showing how much of your total payment is interest
12-month amortization table — see exactly how each payment is split between principal and interest
Zero-interest support — handles 0% interest loans (buy-now-pay-later, dealer financing) correctly

Frequently Asked Questions

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Loan Calculator — Monthly Payments, Total Interest & Amortization Explained