Loan Payment Calculator
How to Calculate a Loan Payment
A loan payment calculator tells you what you will pay each month on any fixed-rate loan - personal loans, student loans, debt consolidation and more. You see the monthly payment, the total you will pay over the life of the loan, and the total interest.
Enter the loan amount, the annual percentage rate (APR) and the term in years. The calculator uses the standard amortization formula, which keeps your payment equal each month while the split between interest and principal shifts over time. Use it to compare offers and to see how a longer term lowers your payment but raises your total interest.
Frequently Asked Questions
How is a monthly loan payment calculated?
With the amortization formula: M = P × r(1 + r)^n / ((1 + r)^n - 1), where P is the loan amount, r is the monthly interest rate (APR/12) and n is the total number of payments. The result is the fixed amount you pay each month.
What is APR?
APR (annual percentage rate) is the yearly cost of borrowing, including interest and most fees, expressed as a percentage. It is the number to compare across lenders, because it reflects the true cost better than the nominal rate alone.
Does a longer loan term mean lower payments?
Yes, spreading the loan over more months lowers the monthly payment, but you pay far more total interest. For example, a $20,000 loan at 7% costs about $396/month for 5 years but only $233/month for 10 years - and nearly double the total interest.