Loan Calculator

What is Loan Calculator?

A loan calculator computes your monthly payment, total interest cost, and full amortization schedule for any fixed-rate loan. Whether you are financing a car, taking a personal loan, or repaying student debt, this tool shows you exactly what you will pay. Our calculator supports four loan presets — auto, personal, student, and custom — each with typical interest rates and terms. You can adjust every parameter and see results instantly with a visual principal-vs-interest breakdown and detailed amortization tables.

How It Works

Select a loan type or enter custom values for the loan amount, annual interest rate, and term in months. The calculator instantly computes the fixed monthly payment using the standard amortization formula and generates a complete payment schedule showing how each payment splits between principal and interest. View the schedule by year or by month.

Formula

Monthly Payment = P × r × (1+r)^n / ((1+r)^n − 1)
Total Payment = Monthly Payment × n
Total Interest = Total Payment − P

Where P = principal, r = monthly rate, n = months

Formula Explained

This is the standard fixed-rate amortization formula used by all banks and lenders. The monthly interest rate is the annual rate divided by 12. Each month, interest accrues on the remaining balance, and the rest of the payment reduces the principal. Early in the loan, most of the payment goes to interest; by the end, most goes to principal. The formula ensures the loan is fully paid off after exactly n payments.

Example

Auto Loan: $25,000 at 6.5% APR for 60 months Monthly Payment: $489.15 Total Interest: $4,349.16 Total Payment: $29,349.16 Interest-to-Principal Ratio: 17.4% Month 1: $354.57 principal + $135.42 interest = $489.15, Balance: $24,645.43 Month 60: $486.51 principal + $2.64 interest = $489.15, Balance: $0.00

Tips & Best Practices

✓Compare total interest costs between different loan terms before committing.
✓Even a 0.5% lower interest rate saves hundreds to thousands over the loan life.
✓Making extra payments toward principal can dramatically reduce total interest.
✓Check if your loan has prepayment penalties before making extra payments.
✓Use the amortization schedule to plan when you will reach specific equity milestones.

Common Use Cases

•Comparing monthly payments for different auto loan offers
•Estimating the true cost of a personal loan over its full term
•Planning student loan repayment strategies
•Deciding between shorter and longer loan terms
•Understanding how much of each payment goes to interest vs principal

Frequently Asked Questions

Monthly payment = P × r × (1+r)^n / ((1+r)^n − 1), where P is the loan principal, r is the monthly interest rate (annual rate / 12 / 100), and n is the total number of months. This formula ensures equal payments that cover both interest and principal over the loan term.

An amortization schedule shows how each monthly payment is split between principal and interest over the life of the loan. Early payments are mostly interest, while later payments are mostly principal. Our calculator shows both monthly and yearly breakdowns with running balances.

As of 2025, average US auto loan rates are: new cars 5-7% for excellent credit (750+), 7-10% for good credit (670-739), and 10-15% for fair credit. Used car rates are typically 1-2% higher. Credit unions often offer lower rates than banks.

A common guideline is the 20/4/10 rule for auto loans: 20% down payment, 4-year term maximum, and total car expenses under 10% of gross income. For personal loans, keep total debt payments under 36% of gross income (debt-to-income ratio).

Shorter terms mean higher monthly payments but significantly less total interest. A $25,000 auto loan at 6.5% costs $3,380 in interest over 36 months vs $5,720 over 60 months. Choose the shortest term you can comfortably afford.