Loan Calculator
Estimate monthly payments and total interest for any loan.
What Is the Loan Calculator?
A loan calculator shows you the true monthly cost of borrowing before you sign anything. Enter the loan amount, the interest rate, and the term, and the tool returns your fixed monthly payment, the total you will pay over the life of the loan, and how much of that goes to interest. That last number surprises people most often because on longer loans interest quietly adds thousands of dollars to a purchase. Comparing terms side by side reveals the tradeoff between an affordable monthly payment and total cost. Use it for personal loans, auto loans, student loan refinancing, or any fixed rate installment debt, and test shorter terms to see how much interest a slightly higher payment saves.
Key Statistics
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13.05%
Average personal loan rate for borrowers with excellent credit as of mid 2026
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$5.2 trillion
Total US consumer credit outstanding
Source: Federal Reserve G.19, June 2026
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714
Average US credit score, which strongly shapes the rate you are offered
Source: Experian, 2025
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$1.75 trillion
Total outstanding US student loan debt for context on installment borrowing
Source: Federal Reserve G.19
The Formula
Monthly Payment = P x [r(1+r)^n] / [(1+r)^n - 1] where P is principal, r is monthly rate, n is number of payments.
Worked Examples
A $25,000 auto loan at 6% APR over 60 months yields a $483 monthly payment with $3,999 in total interest over the life of the loan. A $15,000 personal loan at 9% for 36 months costs $477 per month with $2,171 in total interest.
Three year personal loan at 6 percent
- Borrow $20,000 at 6 percent APR for 36 months
- Monthly payment works out to about $608.44
- Multiply the payment by 36 payments to get total cost of about $21,904
You pay roughly $1,904 in interest over three years.
Five year auto loan at 7 percent
- Finance $25,000 for 60 months at 7 percent APR
- Payment is about $495.03 per month
- Total paid is about $29,702
Interest adds up to about $4,702, so a shorter term or lower rate directly cuts that figure.
Real World Use Cases
Comparing lender offers
Enter each offer with its own rate and fees to see which one truly costs less over the full term rather than just monthly.
Auto financing decisions
Test dealer financing against a credit union loan and see the interest difference in dollars.
Debt consolidation planning
Compare the combined payments on several cards against one consolidation loan at a fixed rate.
Budgeting before you borrow
Work backwards from a comfortable monthly payment to the maximum loan amount you should take on.
Expert Tips
- ✓ Ask lenders for the APR rather than the interest rate because APR includes most fees and makes comparison honest.
- ✓ Shorter terms raise the monthly payment but slash total interest, often by thousands of dollars.
- ✓ Check whether the loan carries a prepayment penalty before planning extra payments.
- ✓ Get prequalified with at least three lenders within a short window so credit inquiries cluster and score impact stays minimal.
- ✓ Even one extra payment per year on a five year loan can shorten it by several months.
Frequently Asked Questions
How do I calculate a monthly loan payment? ▼
Use the formula M = P times r times (1 + r) to the power of n, divided by ((1 + r) to the power of n) minus 1, where P is the loan amount, r is the monthly interest rate, and n is the number of payments. This calculator does that math for you.
What is the difference between APR and interest rate? ▼
The interest rate is what you pay on the borrowed amount. APR (annual percentage rate) includes the interest rate plus lender fees and other costs, so it gives a truer picture of the total cost of borrowing. Compare APRs when shopping loans.
How much will a loan cost in total? ▼
Multiply your monthly payment by the number of payments to get the total paid, then subtract the loan amount to see the total interest. Adding origination fees gives you the full cost of borrowing.
What factors affect my monthly payment? ▼
Three inputs drive the payment: the loan amount, the interest rate, and the loan term. A longer term lowers the monthly payment but increases the total interest you pay over the life of the loan.
What is amortization? ▼
Amortization is spreading a loan into fixed payments that cover both principal and interest over the term. Early payments go mostly toward interest, and later payments go mostly toward principal.
Should I choose a shorter or longer loan term? ▼
A shorter term means higher monthly payments but far less total interest. A longer term lowers your monthly payment but costs more overall. Choose based on your budget and how long you want to carry the debt.
How do I calculate a loan payment myself? ▼
Use the amortization formula: payment equals principal times the monthly rate divided by one minus the quantity of one plus the monthly rate raised to the negative number of payments.
Does paying biweekly instead of monthly help? ▼
Yes. Paying half the monthly amount every two weeks produces 13 full payments per year instead of 12, which shortens the loan and reduces interest.
Common Mistakes to Avoid
- ⚠ Focusing only on the monthly payment and ignoring total interest. A $25,000 loan at 6% for 72 months costs $414 per month but $4,826 in total interest. The same loan for 36 months costs $760 per month but only $2,374 in interest. The cheapest payment is often the most expensive loan overall.
- ⚠ Forgetting about origination fees and prepayment penalties when comparing loans. A loan with a 5% rate and a $500 origination fee may cost more than a 6% loan with no fees for the same amount. Always compare APR which includes these costs.
- ⚠ Entering the interest rate as a monthly rate instead of an annual rate. If your lender quotes a 6% annual rate, enter 6, not 0.5. Entering 0.5 gives you a monthly payment of $484 on a $25,000 5-year loan instead of the correct $483, but getting this wrong on larger loans can mean big differences.
- ⚠ Shopping on monthly payment alone. Stretching a loan to seven years lowers the payment but can add thousands in interest and leaves you owing more than the asset is worth for longer.
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Last updated: · by CalculatorPro Tools