Loan Payment Calculator
Calculate your monthly loan payment, total interest, and payoff date for any loan amount, interest rate, and term. Whether you need a personal loan, auto loan, or student loan estimate, this calculator provides a quick payment breakdown.
How to Calculate Loan Payment
- Gather your loan details: principal amount, annual interest rate, and loan term.
- Convert the annual interest rate to a monthly rate by dividing by 12.
- Convert the loan term to months if given in years.
- Apply the amortization formula to calculate the fixed monthly payment.
- Multiply the monthly payment by the number of months to find total paid, then subtract the principal for total interest.
Formula
Monthly Payment = P x [r(1+r)^n] / [(1+r)^n - 1]
Where:
P = Loan principal (amount borrowed)
r = Monthly interest rate (annual rate / 12 / 100)
n = Total number of monthly payments
Total Interest = (Monthly Payment x n) - PExample
Calculate the monthly payment for a $25,000 loan at 7.5% annual interest for 5 years:
P = $25,000
r = 7.5% / 12 = 0.625% = 0.00625
n = 5 x 12 = 60 months
Monthly Payment = 25000 x [0.00625(1.00625)^60] / [(1.00625)^60 - 1]
Monthly Payment = 25000 x [0.00625 x 1.4533] / [1.4533 - 1]
Monthly Payment = 25000 x 0.009083 / 0.4533
Monthly Payment = $500.97
Total Paid = $500.97 x 60 = $30,058.20
Total Interest = $30,058.20 - $25,000 = $5,058.20Loan Payment Reference Table
| Loan Amount | 3 yr @ 7% | 5 yr @ 7% | 7 yr @ 7% | 10 yr @ 7% |
|---|---|---|---|---|
| $5,000 | $154 | $99 | $75 | $58 |
| $10,000 | $309 | $198 | $151 | $116 |
| $15,000 | $463 | $297 | $226 | $174 |
| $20,000 | $618 | $396 | $302 | $232 |
| $25,000 | $772 | $495 | $377 | $290 |
| $30,000 | $926 | $594 | $453 | $348 |
| $50,000 | $1544 | $990 | $755 | $581 |
| $75,000 | $2316 | $1485 | $1132 | $871 |
| $100,000 | $3088 | $1980 | $1509 | $1161 |
Frequently Asked Questions
What factors affect my monthly loan payment?
Three factors determine your payment: the loan amount (principal), interest rate, and loan term. A higher principal or rate increases payments, while a longer term decreases monthly payments but increases total interest.
Is it better to choose a shorter or longer loan term?
Shorter terms have higher monthly payments but save significantly on total interest. A 3-year loan at 7% costs about 11% of the principal in interest, while a 7-year loan costs about 27%.
How does the interest rate affect total cost?
Even small rate differences add up over time. On a $25,000 loan for 5 years, the difference between 5% and 7% is about $1,300 in total interest. Always shop for the lowest rate you can qualify for.
Can I pay off my loan early?
Most loans allow early payoff, though some charge prepayment penalties. Paying extra each month reduces your principal faster, saving interest and shortening the loan term. Check your loan agreement for any restrictions.
What is amortization?
Amortization is the process of paying off a loan through regular payments. Each payment covers interest on the remaining balance plus some principal. Early payments are mostly interest, while later payments are mostly principal.