Loan Calculator
Calculate a monthly payment for a fixed-rate loan.
Loan calculator
Monthly Payment
$483.32
- Loan amount
- $25,000.00
- Total interest
- $3,999.20
- Total payments
- $28,999.20
How it works
Each monthly payment contains principal and interest. Over time those payments pay the balance down to zero.
For a fixed-rate amortizing loan, the monthly payment is:
M = P × r(1 + r)n / ((1 + r)n − 1)
- M = monthly payment
- P = loan amount
- r = monthly interest rate
- n = number of monthly payments
At 0% interest there is no compounding, so the payment is simply the loan amount divided by the number of months.
- Loan amount:
- $25,000.00
- Interest rate:
- 6%
- Loan term:
- 5 years
- Monthly payment:
- $483.32
- Total interest:
- $3,999.20
Questions
How is the monthly loan payment calculated?
The calculator uses the standard fixed-rate amortization formula. It converts the annual rate to a monthly rate and spreads the loan across the number of monthly payments in the term.
What is an amortizing loan?
An amortizing loan is repaid with regular payments that cover both interest and principal. Early payments are more interest; later payments are more principal, until the balance reaches zero.
How does the interest rate affect my payment?
A higher annual rate increases the monthly payment and the total interest paid over the term. A lower rate reduces both.
How does the loan term affect total interest?
A longer term usually lowers the monthly payment but increases total interest because the balance remains outstanding for more months. A shorter term does the reverse.
What happens at 0% interest?
At 0% there is no interest. The monthly payment is the loan amount divided evenly across the months in the term, and total payments equal the loan amount.
Does this calculator include fees or insurance?
No. It calculates principal and interest only. Down payment, fees, taxes, insurance, and extra payments are not included.
Can I use this for a car loan or personal loan?
Yes, for a fixed-rate loan that is repaid with equal monthly payments. Actual lender terms may differ.
Does this calculator constitute a loan offer?
No. This is a mathematical calculator. It is not a lender and does not constitute a loan offer.