Loan Calculator
Calculate your monthly loan payment, total interest, and full repayment schedule instantly.
Monthly Payment
$513/mo
Total Interest
$5,775
Total Amount Paid
$30,775
Loan Amount
$25,000
Repayment schedule
See how your loan balance decreases over time
| Year | Principal Paid | Interest Paid | Balance |
|---|---|---|---|
| 1 | $4,191 | $1,964 | $20,809 |
| 2 | $4,561 | $1,594 | $16,248 |
| 3 | $4,964 | $1,191 | $11,284 |
| 4 | $5,403 | $752 | $5,881 |
| 5 | $5,881 | $274 | $0 |
How to use this loan calculator
This loan calculator gives you the exact monthly payment, total interest, and full repayment schedule for any loan. Enter your loan amount, set your annual interest rate, and choose your loan term. All results update instantly.
The monthly payment uses the standard amortization formula: M = P[r(1+r)^n] / [(1+r)^n − 1], where P is the loan amount, r is the monthly rate, and n is the number of payments. In the early months, most of each payment goes toward interest — the amortization table shows exactly how this shifts over time.
Use this calculator to compare loan terms side by side. A shorter term means higher monthly payments but much less total interest paid. A longer term lowers your monthly payment but costs significantly more in interest over the life of the loan.
Frequently Asked Questions
How is a loan monthly payment calculated?
Monthly payments are calculated using the standard amortization formula: M = P[r(1+r)^n] / [(1+r)^n − 1], where P is the loan principal, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments. Each payment covers the interest owed for that month, with the remainder reducing the principal balance.
What is the difference between interest rate and APR?
The interest rate is the base cost of borrowing expressed as a percentage of the principal. APR (Annual Percentage Rate) includes the interest rate plus other fees like origination fees, closing costs, and points, giving a more complete picture of the loan's true cost. When comparing loans, use APR for an apples-to-apples comparison — a loan with a lower interest rate but high fees may actually cost more than a higher-rate loan with no fees.
Should I choose a shorter or longer loan term?
It depends on your financial priorities. A shorter term (e.g., 3 years vs. 5 years) means higher monthly payments but significantly less total interest paid — often 30–50% less over the life of the loan. A longer term lowers your monthly payment and improves cash flow, but you'll pay more in total interest. If you can comfortably afford the higher monthly payment, a shorter term is almost always better financially.
What is a good interest rate for a personal loan?
Personal loan rates typically range from 6% to 36% depending on your credit score, income, and lender. Borrowers with excellent credit (750+) can qualify for rates of 6–12%. Good credit (700–749) typically sees 12–20%. Fair to poor credit often means 20–36%. Credit unions and online lenders sometimes offer lower rates than traditional banks. Always compare at least 3–5 lenders before accepting an offer.
Does paying off a loan early save money?
Yes, paying off a loan early reduces the total interest you pay because interest accrues on the remaining balance. However, some loans have prepayment penalties — a fee charged for paying off the loan ahead of schedule. Always check your loan agreement for prepayment penalties before making extra payments. If there are no penalties, making even one extra payment per year can significantly reduce both the loan term and total interest paid.
How does my credit score affect my loan rate?
Your credit score is one of the most significant factors lenders use to set your interest rate. A 100-point improvement in your credit score can reduce your rate by 2–5 percentage points on a personal loan. On a $25,000, 5-year loan, dropping from 18% to 13% saves over $3,500 in total interest. Before applying for a large loan, consider spending 3–6 months improving your credit by paying down balances and ensuring no late payments.
What is amortization and why does it matter?
Amortization is the process of spreading loan payments over time so each payment covers both interest and principal. Early in the loan, most of each payment goes toward interest because the outstanding balance is high. As the balance decreases, more of each payment goes toward principal. This is why paying off loans early — especially in the first few years — saves disproportionately more interest: you're eliminating the high-interest-cost early months.
Can I use this calculator for auto loans and student loans?
Yes. The underlying math is the same for all fixed-rate installment loans — personal loans, auto loans, student loans, and business loans all use the same amortization formula. The main differences between loan types are the typical interest rate ranges, term lengths, and lender eligibility criteria, not the calculation method. Select the loan type at the top of the calculator to see typical ranges, though your actual rate will depend on your specific lender and creditworthiness.