Loan Calculator
Calculate monthly payments, total interest, and loan amortization for any type of loan.
The total amount you want to borrow
The yearly interest rate (APR)
How long you'll take to repay the loan
How often you'll make payments
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Estimate monthly payments and total cost for personal loans with fixed interest rates.
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What is a Loan Calculator?
A loan calculator is a tool that helps borrowers estimate their monthly payments and the total cost of a loan based on the principal amount, interest rate, and loan term. It is essential for planning budgets for personal loans, business loans, or any other type of amortized debt.
How it Works
Most loans use the amortization formula to calculate equal monthly payments that pay off the loan and interest over a set period.
- A = Monthly Payment Amount
- P = Principal (Loan Amount)
- r = Monthly Interest Rate (Annual Rate / 12)
- n = Total Number of Payments (Loan Term in Years × 12)
Example Calculation
Suppose you take out a $25,000 personal loan with an annual interest rate of 6.5% for a term of 5 years.
Principal (P): $25,000
Monthly Rate (r): 6.5% / 12 = 0.005417
Total Payments (n): 5 × 12 = 60
Monthly Payment: $489.15
Total Interest Paid: $4,349.23
Total Amount Repaid: $29,349.23
Frequently Asked Questions
What is an amortization schedule?
An amortization schedule is a table listing each periodic payment on a loan. It shows the amount of principal and interest that comprise each payment until the loan is paid off.
How does the loan term affect interest?
Generally, a longer loan term lowers your monthly payment but increases the total amount of interest you pay over the life of the loan. A shorter term increases monthly payments but saves on interest.
What is APR vs. Interest Rate?
The interest rate is the cost of borrowing the principal. The APR (Annual Percentage Rate) includes the interest rate plus other costs like fees and discount points, providing a broader measure of the cost of borrowing.
Can I pay off my loan early?
Most personal and auto loans allow early payoff without penalties, which can save you significant money on interest. However, always check your specific loan agreement for prepayment penalties.
What is the difference between secured and unsecured loans?
Secured loans are backed by collateral (like a car or house), often resulting in lower interest rates. Unsecured loans (like personal loans) rely on your creditworthiness and typically have higher rates.