Loan Calculator

This page is the general-purpose loan calculator for a standard amortized loan: one starting balance, one fixed annual rate, one repayment term, and equal monthly payments. It is intentionally broad. If the loan is unsecured and you want borrower-specific context, the personal loan calculator goes deeper on origination fees and debt consolidation. If the loan is tied to a vehicle price, sales tax, and down payment, the auto loan calculator is a better fit. If the key question is payment frequency rather than monthly amortization, use the loan payment calculator.

The form returns four values. Monthly payment is the fixed installment needed to bring the balance to zero by the end of the term. Total interest is the sum paid above the original principal. Total paid combines principal and interest. Payments is the number of monthly installments, calculated as years multiplied by 12. Those outputs match the calculation in the form: it does not add taxes, insurance, points, origination charges, deferment periods, or changing rates.

Inputs and assumptions

Enter the amount you expect to borrow, the annual percentage rate shown in the loan terms, and the repayment term in years. The calculator converts the annual rate to a monthly rate by dividing by 12, then applies the amortized payment formula. That means every scheduled payment first covers the interest charged for that month and then reduces principal. Early payments contain more interest because the outstanding balance is larger; later payments contain more principal because the balance has fallen.

The term can include half years because the form allows 0.5-year steps. A 5.5-year term becomes 66 payments. The calculator allows a loan amount of zero, which will return a zero payment, but a realistic borrowing comparison should use the amount that will actually be financed. If the rate is zero, the formula simplifies to an even split of principal across the payment count.

Formula

For a loan with interest, the monthly payment is:

$\text{monthly payment} = \frac{\text{principal} \cdot \text{monthly rate} \cdot (1 + \text{monthly rate})^{\text{months}}}{(1 + \text{monthly rate})^{\text{months}} - 1}$

The monthly rate and payment count are:

$\text{monthly rate} = \frac{\text{APR}}{100 \cdot 12}$

$\text{months} = \text{years} \cdot 12$

Then:

$\text{total paid} = \text{monthly payment} \cdot \text{months}$

$\text{total interest} = \text{total paid} - \text{principal}$

For a zero-rate loan, the calculator uses:

$\text{monthly payment} = \frac{\text{principal}}{\text{months}}$

Worked example

Suppose you borrow $25,000 at 6.5% APR for 5 years. The monthly rate is 6.5 divided by 100 and then divided by 12, or about 0.0054167. The number of payments is 5 multiplied by 12, or 60. Applying the amortized payment formula gives a monthly payment of $489.15. Multiplying $489.15 by 60 gives total paid of $29,349.22. Subtracting the $25,000 principal leaves $4,349.22 of total interest.

Those values are exactly the pattern returned by the form: primary result $489.15 monthly payment, total interest $4,349.22, total paid $29,349.22, and 60 payments. If the APR were 0% with the same amount and term, the calculator would instead divide $25,000 by 60 for a payment of $416.67 and no interest.

APR, note rate, and fees

Borrowers often see both an interest rate and an APR. The interest rate is the rate applied to the balance. APR is a disclosure measure intended to help compare credit costs and may include certain fees. This calculator uses the percentage you enter as the rate applied in the amortization formula; it does not separately model a fee schedule. If a lender deducts an origination fee from the proceeds, you may receive less cash than the amount you repay. If a lender adds a fee to the balance, the financed principal is higher.

For quote shopping, compare the calculated result with lender disclosures rather than relying on payment size alone. A shorter loan at a higher payment may still cost less overall. A longer loan can ease monthly cash flow but usually keeps the balance outstanding longer, which raises total interest unless the rate is much lower.

Practical tips before borrowing

• Test one shorter and one longer term so the payment-versus-interest trade-off is visible.
• If fees are financed, include them in the principal to approximate the payment.
• Check whether the rate is fixed for the full term or can change later.
• Ask whether extra principal payments are allowed without penalty; then model payoff timing with the loan repayment calculator.
• Compare borrowing cost with your household cash flow in the budget calculator and your payment load in the debt-to-income calculator.

This calculator is informational and not financial advice. It cannot determine whether you qualify for credit, whether a lender’s disclosures are complete, or whether a particular loan is appropriate for your situation.

Sources

• Consumer Financial Protection Bureau, What is the difference between a loan interest rate and the APR? — APR and interest-rate comparison guidance.
• Consumer Financial Protection Bureau, Loan Estimate explainer — consumer disclosure context for loan costs and comparisons.
• Federal Reserve, Consumer Credit - G.19 — official consumer-credit data context.