๐ฆ Loan Calculator
Calculate monthly payments, total interest, and view a full amortization schedule for any loan.
How to Use the Loan Calculator
Our free loan calculator helps you understand the true cost of any loan โ whether it is a mortgage, auto loan, personal loan, or student loan. Get instant results with a detailed amortization schedule that shows exactly where each payment goes.
Step-by-Step Instructions
- Enter the loan amount โ this is the total amount you plan to borrow. For a mortgage, this would be the purchase price minus your down payment.
- Enter the annual interest rate โ the yearly percentage rate (APR) charged by the lender. Even small differences in interest rate can dramatically affect total cost over time.
- Enter the loan term โ how long you have to repay the loan. Use the toggle to switch between years and months. Common mortgage terms are 15 or 30 years; auto loans are typically 3โ7 years.
- Click "Calculate Loan Payment" to see your monthly payment, total payment, total interest, and a visual breakdown of principal versus interest.
- Review the amortization schedule โ it shows 12 months by default. Click "Show All Months" to see the entire repayment timeline month by month.
The amortization table reveals a key insight: early in the loan, most of your payment goes toward interest. As time progresses, more of each payment is applied to the principal balance. This is why making extra payments early can save thousands of dollars in interest over the life of the loan.
About Loan Amortization
A loan is an agreement where a lender provides money to a borrower, who agrees to repay it over time with interest. The process of paying off a loan through regular, equal installments is called amortization. Each payment covers both interest charges and a portion of the outstanding principal balance.
The Loan Payment Formula
Monthly payment is calculated using the formula: M = P ร [r(1+r)โฟ] / [(1+r)โฟ โ 1], where P is the principal, r is the monthly interest rate (annual rate รท 12), and n is the total number of monthly payments. This ensures equal payments throughout the life of the loan.
Understanding Interest Cost
The total interest you pay over the life of a loan can be surprising. For example, a $250,000 mortgage at 6.5% over 30 years results in total interest of over $318,000 โ more than the original loan amount! This is why choosing a shorter term or a lower rate can yield massive savings. A 15-year mortgage at the same rate would save you over $195,000 in interest compared to a 30-year term.
Types of Loans
This calculator works for any fixed-rate amortizing loan, including mortgages, auto loans, personal loans, student loans, and business loans. For adjustable-rate mortgages (ARMs) or interest-only loans, consult a specialized calculator as the payment structure differs.
Frequently Asked Questions
Our calculator uses the standard amortization formula used by banks and financial institutions. The results are highly accurate for fixed-rate loans. However, actual payments may vary slightly due to rounding, fees, insurance, taxes, or other charges not included in this calculation.
An amortization schedule is a complete table showing every payment over the life of a loan. For each payment, it breaks down how much goes to interest, how much goes to principal, and the remaining balance. This helps you see exactly when your loan will be paid off and how much total interest you will pay.
There are several strategies: choose a shorter loan term, make a larger down payment to reduce the principal, shop around for lower interest rates, make extra payments toward principal when possible, and consider refinancing if rates drop significantly after you take out the loan.
No. This calculator computes principal and interest (P&I) only. Your actual monthly mortgage payment may be higher because it could include property taxes, homeowners insurance, and possibly private mortgage insurance (PMI). These are collectively known as PITI payments.
The interest rate is the base cost of borrowing money, while the APR (Annual Percentage Rate) includes the interest rate plus other fees and charges rolled into the total cost. The APR gives a more complete picture of the loan's true cost. Our calculator uses the stated interest rate for simplicity.