🏦 Loan Payment Calculator
Enter the loan amount, interest rate and term to see your monthly payment — and how much total interest each repayment method costs.
Monthly payment (amortized)
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How to use this loan calculator
- Pick your currency. The math is the same for any currency; it only changes the symbol and rounding (cents for USD/EUR/GBP, whole won for KRW).
- Enter the loan amount (principal), the annual interest rate and the term in months. Use the buttons for common terms like 5, 15 or 30 years.
- If your loan starts with an interest-only period, such as some construction loans, HELOC draw periods or Korean "grace period" (거치기간) loans, enter it in months. Otherwise leave it at 0.
- The big number is your monthly payment on a standard amortized loan. The table compares it with two other repayment methods and highlights the one with the lowest total interest.
The three repayment methods
- Amortized (fixed payment): you pay the same amount every month. Early payments are mostly interest, and later ones are mostly principal. Most US mortgages, auto loans and personal loans work this way.
- Equal principal: you repay the same slice of principal every month, plus interest on the remaining balance. The first payment is the highest and payments shrink over time. It has the lowest total interest of the three.
- Interest-only (balloon): you pay only interest each month and repay the entire principal at the end. It has the lowest monthly payment but the highest total interest, and you need a plan for the final lump sum.
Loan payment formula
The fixed monthly payment on an amortized loan 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 monthly payments. Each month's interest is remaining balance × r, and the rest of the payment goes to principal.
Examples
| Loan | Rate · term | Monthly payment | Total interest |
|---|---|---|---|
| $25,000 car / personal loan | 7% · 5 years | $495.03 | $4,701.82 |
| $300,000 mortgage | 6.5% · 15 years | $2,613.32 | $170,398.28 |
| $300,000 mortgage | 6.5% · 30 years | $1,896.20 | $382,636.71 |
| $300,000 mortgage | 7% · 30 years | $1,995.91 | $418,524.05 |
On the same $300,000 at 6.5%, the 15-year loan costs about $700 more a month but saves over $210,000 in interest. Half a percentage point (6.5% to 7%) adds about $100 a month and $36,000 over 30 years.
Tips
- Test a higher rate. For a variable or adjustable-rate loan, add 1 to 2 points to the rate to see a worst-case payment.
- Extra payments reduce the balance that interest is charged on, so every extra dollar early in the loan saves the most. Check for prepayment penalties first.
- APR vs. interest rate: lenders' APR includes fees, so it is usually a bit higher than the note rate. Use the note rate here to get the payment, and use APR to compare offers.
- To see every payment broken into principal, interest and balance, use the amortization schedule calculator.
This calculator uses monthly interest = balance × annual rate ÷ 12. Real loans may use daily interest, and the payment shown here excludes property taxes, insurance (PITI), PMI and fees. Your lender's figures may differ slightly.
FAQ
How is a monthly loan payment calculated?
For a standard amortized loan, payment = P × r × (1+r)^n ÷ ((1+r)^n − 1), where r is the annual rate ÷ 12 and n is the number of months. For example, $300,000 at 6.5% for 30 years is $1,896.20 a month.
Which repayment method costs the least interest?
Equal principal has the lowest total interest because the balance drops fastest. Amortized loans cost a bit more, and interest-only (balloon) loans cost the most because the full principal stays outstanding until the end.
Does this include taxes and insurance?
No. It shows principal and interest only. For a mortgage, add property tax, homeowners insurance and any PMI or HOA dues to get your full monthly housing cost.
What happens if I pay extra or pay off early?
Any extra principal you pay reduces future interest, because interest is charged on the remaining balance. Some loans charge a prepayment penalty in the first few years, so check your loan agreement.
How do I estimate a variable-rate loan?
When the rate resets, the payment is recalculated from the remaining balance and remaining term. Enter a rate 1 to 2 percentage points higher to see a realistic worst case.