Loan Calculator
Calculate monthly loan payments, total interest charges, and overall repayment costs with amortization schedules for personal, auto, and student loans.
About the Loan Calculator
The Loan Calculator helps borrowers evaluate installment loan terms before committing to financing agreements with banks, credit unions, or online lenders. Installment loans—including auto financing, personal loans, and debt consolidation packages—are structured around an amortized repayment formula.
By entering the principal loan balance, annual percentage interest rate (APR), and loan term length in months or years, the calculator computes your exact monthly installment payment, the total interest paid over the life of the loan, and the total repayment figure.
How to Calculate Loan
Enter the total Loan Amount (Principal) you plan to borrow.
Enter the annual interest rate (APR percentage).
Select the loan term duration (in years or months).
Click Calculate to see your monthly payment, total interest cost, and principal-to-interest breakdown.
Standard Loan Amortization Formula
Monthly Payment (P) = [ r × PV × (1 + r)ⁿ ] / [ (1 + r)ⁿ - 1 ] Total Repayment = Monthly Payment × n Total Interest = Total Repayment - PV
PV is the initial loan principal, r is the periodic monthly interest rate (Annual Rate / 12 / 100), and n is the total number of monthly payments.
Variable Descriptions
- PV
- Present Value (Principal loan amount borrowed)
- r
- Monthly interest rate: Annual Rate ÷ 1200
- n
- Total number of monthly payment periods
Worked Example
Important Considerations & Tips
- Lenders may include origination fees, document fees, or credit insurance which slightly increase the Effective APR.
- Making additional principal prepayments significantly reduces overall interest and shortens loan payoff duration.
- Longer loan terms lower monthly payments but increase the cumulative interest paid.
Frequently Asked Questions
How do lenders calculate monthly loan payments?
Lenders use standard amortization formulas where each monthly payment is divided between interest (calculated on the remaining balance) and principal reduction.
What is the difference between APR and interest rate?
The interest rate is the basic annual cost of borrowing money, whereas the Annual Percentage Rate (APR) includes both the interest rate and any mandatory lender fees or points.
How does a larger down payment affect a loan?
A larger down payment lowers the principal borrowed, which immediately decreases both your monthly payment and total interest paid over time.
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