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Loan Calculator - Payment & Interest Calculator

Free loan calculator to find monthly payments, total interest, and amortization schedule. Works for personal loans, auto loans, and any fixed-rate loan.

Loan Calculator

Calculate monthly payments, total interest, and view amortization schedule

Loan Summary

Enter your values to see results

and click the "Calculate" button

What is a Loan Calculator?

A loan calculator helps you determine your monthly payment, total interest, and overall cost of borrowing. By entering the loan amount, interest rate, and term, you can see exactly how much you'll pay each month and over the life of the loan. This is essential for budgeting and comparing loan offers from different lenders.

How to Use This Calculator

Enter the loan amount you need to borrow
Enter the interest rate (select if monthly or annual)
Enter the loan term in months
Choose payment type (fixed or declining)
Click Calculate to see your payment breakdown

Loan Payment Formula

M = P × [r(1+r)^n] / [(1+r)^n - 1]

Where M = Monthly Payment, P = Principal (loan amount), r = Monthly interest rate, n = Number of payments. This is the standard amortization formula for fixed-rate loans.

Frequently Asked Questions

What's the difference between APR and interest rate?

Interest rate is the base cost of borrowing. APR (Annual Percentage Rate) includes interest plus fees, giving you the true annual cost. Always compare APR when shopping for loans.

How is monthly payment calculated?

For fixed-rate loans: M = P × [r(1+r)^n] / [(1+r)^n - 1]. P = principal, r = monthly rate, n = number of payments. Our calculator does this automatically.

Should I choose a shorter or longer loan term?

Shorter term = higher monthly payment but much less total interest. Longer term = lower payment but more interest. Choose based on what you can afford monthly while minimizing total cost.

Can I pay off my loan early?

Most loans allow early payoff, but check for prepayment penalties. Paying extra toward principal reduces total interest significantly.

What credit score do I need for a good rate?

Excellent (750+): Best rates. Good (700-749): Competitive rates. Fair (650-699): Higher rates. Poor (<650): May have difficulty qualifying or face very high rates.

Fixed rate vs variable rate - which is better?

Fixed rate stays the same - predictable payments, protection from rate increases. Variable rate may start lower but can increase. For long-term loans, fixed is usually safer.

How do extra payments affect my loan?

Extra payments go to principal, reducing balance faster. This decreases total interest and shortens the loan term. Even small extra amounts add up significantly over time.

What is amortization?

Amortization is the process of paying off a loan through scheduled payments. Each payment covers interest first, then principal. An amortization schedule shows this breakdown for every payment.

Why is most of my early payment going to interest?

Interest is calculated on remaining balance. With a high initial balance, interest is high. As you pay down principal, less goes to interest and more to principal.

What happens if I miss a payment?

Late fees apply, it may hurt your credit score, and you may trigger a higher penalty rate. Always contact your lender if you'll miss a payment - they may offer options.

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