See how much you’ll pay each month for any loan amount, interest rate, and term.
Use this calculator to break down your loan into clear, predictable payments. Enter your total loan amount, annual rate of interest, and term to view your monthly cost, total interest, and payoff timeline. The tool follows the standard amortization formula, giving you real numbers you can compare before borrowing, refinancing, or planning early payoff.
The calculator→ follows a standard amortization formula that spreads your loan payments evenly across the full term. Each payment covers two parts: interest on the remaining balance and a portion of the principal. At the beginning of the term, a larger share goes toward interest. Toward the end, more of your payment reduces the principal balance.
This keeps your monthly payment amount the same while the balance gradually declines until it reaches zero.
The calculator follows a standard amortization formula that spreads your loan payments evenly across the full term. Each payment covers two parts: interest on the remaining balance and a portion of the principal. At the beginning of the term, a larger share goes toward interest. Toward the end, more of your payment reduces the principal balance.
This keeps your monthly payment amount the same while the balance gradually declines until it reaches zero.
Where:
This formula calculates a fixed monthly payment that will completely repay your loan within its term, assuming a constant interest rate and monthly compounding.
If you enter an extra monthly or one-time payment in the calculator, it adjusts the payoff period and total interest automatically. The underlying math remains the same; only the number of months and interest total change.
| Symbol | Variable | Description |
|---|---|---|
| P | Loan amount | The total amount borrowed before interest. It is the starting balance of your loan. |
| r | Monthly interest rate | The annual interest rate divided by 12 and then by 100. Example: 5% becomes 0.0041667 per month. |
| n | Term (months) | The total number of payments. For a 30-year loan, this equals 360 months. |
| M | Monthly payment | The fixed amount you pay each month. It includes both principal and interest. |
Understanding this formula helps you see how small changes in rate or term affect your monthly cost. A lower rate or shorter term can save thousands in total interest. A longer term or higher rate increases the total cost even if the monthly payment seems easier to manage.
The calculator uses this logic to show how different loan scenarios compare so you can make informed borrowing decisions.
Let’s use a realistic loan scenario to see how the math works.
Loan amount (P): $250,000
Annual interest rate: 5%
Term: 30 years (360 months)
Step 1. Convert the annual rate to a monthly rate
5% ÷ 12 = 0.4167% per month
or in decimal form, r = 0.0041667
Step 2. Apply the loan payment formula
Step 3. Solve
Monthly payment (M) ≈ $1,342.05
Total interest paid ≈ $233,142.00
Total of all payments = $483,142.00
Your monthly payment of about $1,342 includes both principal and interest. In the early years, most of that payment goes toward interest. Over time, a larger share goes toward paying down the loan balance.
If you made even a small extra payment each month — say $100 — you could shorten the loan by several years and save tens of thousands in interest. The calculator updates those results automatically when you add extra payments.
It shows the monthly payment required to repay a loan given amount, rate, and term. The tool also reports total interest paid and the payoff timeline. Use extra payment fields to see how early payments change interest and term.
It uses the standard amortization formula that divides principal and interest into fixed monthly payments. The monthly rate is the annual rate divided by 12. The formula ensures the loan balance reaches zero after the final payment.
Not always. This calculator estimates payments for fixed-rate loans only. Lenders may add fees, use different compounding schedules, or apply rounding and escrow items that change the final quoted payment.
Extra payments reduce the principal faster, which lowers total interest and shortens the payoff period. Small regular extras usually yield bigger interest savings than an equivalent one-time payment because they reduce interest earlier.
No. It assumes a constant interest rate for the entire term. For adjustable-rate loans, you need a model that accepts future rate changes or a lender quote that shows the reset schedule.
It is exact under the assumptions used: monthly compounding and consistent payment amounts. Partial-month periods, interest-only periods, and special payment dates can alter month-to-month numbers and need custom calculation.
Use the monthly payment and total interest to compare loan options side by side. Check scenarios with small rate or term changes and include other costs like taxes, insurance, and fees before committing.
