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Loan Calculator – Monthly Payment, Interest and Payoff Schedule

Enter the amount, interest rate and term of any loan to see your monthly payment, the total interest you’ll pay and a year-by-year amortization schedule. Add an extra monthly payment to see how much sooner you could be debt-free.

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How to use the loan calculator

  1. Enter the loan amount — what you borrow, not including interest.
  2. Enter the interest rate. Use the APR from your loan offer if you have it.
  3. Enter the term in years or months, for example 5 years or 60 months.
  4. Optionally add an extra monthly payment to see how much sooner you finish.
  5. Read the monthly payment, total interest and payoff time. The table below shows each year’s principal, interest and remaining balance.

The loan payment formula

Payment = P × r × (1 + r)^n ÷ ((1 + r)^n − 1)
  • P = the amount borrowed
  • r = monthly interest rate = APR ÷ 12 ÷ 100
  • n = number of monthly payments

If the rate is 0%, the payment is simply P ÷ n.

Worked example: a $25,000 personal loan

Borrow $25,000 at 7.5% APR for 5 years:

  • r = 7.5 ÷ 12 ÷ 100 = 0.00625 and n = 60
  • Monthly payment = $500.95
  • Total of payments ≈ $30,057, so total interest ≈ $5,057

In the first month, interest is $25,000 × 0.00625 = $156.25, so about $345 of the payment reduces the balance. By the last year almost the whole payment is principal.

Add $100 a month extra and the loan is paid off in 49 months instead of 60, saving about $1,014 in interest.

Choosing a loan term

A longer term lowers the monthly payment but raises the total interest. A shorter term costs more each month but much less overall. A good habit is to choose the shortest term whose payment still leaves room in your budget for savings and emergencies — then add extra payments when you can.

Things the payment doesn’t include

  • Origination or arrangement fees taken from the loan or paid upfront
  • Payment protection or credit insurance sold with the loan
  • Late-payment fees and penalties
  • Early-repayment charges — some lenders charge for paying off early, so check before overpaying

Who uses a loan calculator

  • Borrowers comparing offers from banks, credit unions and online lenders
  • Small businesses checking whether an equipment or working-capital loan fits their cash flow
  • Students and graduates planning loan repayments
  • Anyone consolidating debt, to see if one new loan beats several old ones

For a home loan with property tax and insurance, use the mortgage calculator. For cars, the auto loan calculator adds sales tax and trade-in. Results are estimates for planning — your lender’s offer is final. See our disclaimer.

Frequently asked questions

How is a monthly loan payment calculated?

Lenders use the amortization formula: payment = P × r × (1 + r)^n ÷ ((1 + r)^n − 1), where P is the amount borrowed, r the monthly interest rate (APR ÷ 12 ÷ 100) and n the number of monthly payments. Every payment is the same; the split between interest and principal changes each month.

What is the monthly payment on a $25,000 loan?

At 7.5% APR over 5 years (60 payments) the payment is about $500.95 a month, and you pay about $5,057 in interest. Over 3 years it rises to about $778 a month but the interest falls to roughly $3,000.

Do extra payments really save money?

Yes. Every extra amount goes straight to the principal, so the next month’s interest is charged on a smaller balance. On the $25,000 example, paying $100 a month extra clears the loan 11 months early and saves about $1,014 in interest.

Is APR the same as the interest rate?

Not always. The interest rate is what you pay on the balance. APR also spreads upfront fees over the loan, so it is usually a little higher. Use the APR in this calculator if fees are added to the loan, or check the APR calculator to see the difference.

Does this work in my currency?

Yes. The maths is the same everywhere. Pick your currency from the list above the inputs and the results are shown in it. For Indian loans quoted as EMI, the EMI calculator gives the same answer with lakh and crore formatting.

Why does most of my early payment go to interest?

Interest is charged on what you still owe. At the start the balance is at its highest, so interest takes a bigger share of each payment. As the balance falls, more of each payment goes to principal.

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