Loan calculator
Estimate a monthly loan payment, total repayment and overpayment.
Fill in the fields and the result will appear here automatically.
The loan calculator estimates a monthly payment, total repayment and interest cost from the loan amount, term and annual rate. It is useful when comparing bank offers, planning a purchase financed by debt or checking whether a future payment fits your budget. Use it before applying, when you still want to test different terms.
How it works
Formula and logic
The calculator first converts the annual percentage rate into a monthly rate and uses the selected loan term to build a payment estimate. With an amortized payment, the monthly amount stays the same during the whole term. Early payments contain more interest, while later payments repay more principal. With a declining balance style payment, the principal is split into equal parts and interest is calculated on the remaining balance each month, so the first payments are higher and later payments fall. Total repayment is the sum of all scheduled payments. Interest cost is the difference between that total and the original amount borrowed. The result does not include origination fees, insurance, late penalties, taxes or optional bank products. Treat it as a clean loan model for comparison, not as the final contract schedule from a lender.
Example
Suppose you want to borrow $20,000 for 5 years at 8% APR and choose an amortized payment. You enter 20000 as the loan amount, 5 years as the term and 8 as the annual rate. The calculator returns an estimated monthly payment of about $406, a total repayment of roughly $24,300 and interest of about $4,300. That number helps you judge whether the payment is comfortable before you request an official offer. If you shorten the term to 3 years, the payment rises, but total interest usually falls.
Fields and units
- Amount — $
- Term — unitless
- Term unit — yes or no
- Rate — % yearly
- Payment type — yes or no
- Extra monthly payment — $
- One-time fee — $
How to use
- — Enter the loan amount.
- — Choose the term and annual interest rate.
- — Select the payment type and check the result.
Do not judge a loan only by the monthly payment. A longer term can make the payment look affordable while raising the total interest cost. Compare the total repayment, not just the first line of the offer. Also check whether the advertised rate requires insurance, an account package, automatic payments or other conditions. If you may repay early, compare scenarios with extra payments and ask whether the lender charges prepayment fees. The estimate can differ from a real schedule when a lender calculates interest daily, uses exact calendar dates or adds closing costs outside the interest rate. For a serious decision, use this calculator to narrow the options, then compare the lender’s APR, full fee disclosure and payment schedule carefully.
Sources and review status
- Calculation method
- The calculator uses the standard annuity or differentiated payment formula based on the selected payment type.
- Data or methodology source
- The formula and input definitions documented on this page.
- Last reviewed
- Limitation
- This is a reference estimate. Contract fees, benefits and individual terms are included only when the form has a matching input.
FAQ
How do I calculate a monthly loan payment?
Enter the amount borrowed, annual interest rate, term and payment type. For an amortized loan, the calculator spreads principal and interest into equal monthly payments. For a declining balance structure, principal repayment is fixed and interest falls over time. The result is an estimate before lender fees, insurance and contract-specific costs.
What affects the total interest paid on a loan?
The biggest drivers are the interest rate, loan amount and term. A higher rate increases interest immediately, while a longer term gives interest more months to accumulate. Extra fees and optional products can also raise the real cost, even if the monthly payment looks manageable.
Is a shorter loan term always better?
A shorter term usually reduces total interest, but it raises the monthly payment. It is better only if the payment remains comfortable and does not force you into missed payments or expensive debt elsewhere. Compare both monthly affordability and total repayment before choosing the term.
Does this loan calculator include fees?
No. The base calculation uses only amount, term, interest rate and payment type. Origination fees, insurance, account charges, taxes and late penalties are outside the formula. When comparing real offers, check the APR and the lender’s payment schedule to understand the complete cost.
How can I lower my loan payment?
You can lower the payment by borrowing less, getting a lower rate, choosing a longer term or making a larger upfront payment. A longer term may increase total interest, so it should be compared carefully. Extra principal payments can also reduce future interest if the lender allows them without penalties.