How to use the loan calculator
- Enter the loan amount — Type the amount you plan to borrow (the principal) in USD, for example $20,000. This is the cash you receive up front, before any interest is added.
- Add the interest rate — Enter the annual interest rate (APR) the lender quoted, such as 7%. The calculator converts it to a monthly rate behind the scenes.
- Set the term — Choose how long you'll repay the loan, in years or months (for example, 5 years = 60 monthly payments).
- Read your results — The calculator instantly shows your fixed monthly payment, the total interest you'll pay, and the total cost of the loan (principal plus interest).
- Compare scenarios — Adjust the rate or term to see how a lower rate or shorter term changes the monthly payment and the total you repay.
What this calculator shows
This loan calculator estimates the three numbers that matter most before you sign: your fixed monthly payment, the total interest you'll pay over the life of the loan, and the total cost (the amount you borrowed plus all that interest). You enter three things — the loan amount, the annual interest rate, and the term — and the results update instantly.
It works for most common fixed-rate, fixed-term loans: personal loans, auto loans, and similar installment borrowing. The figures are estimates for planning and education, not a loan offer, and they don't include fees, insurance, or taxes a lender might add.
How loan repayment works (amortization)
A standard loan is amortized, which means you pay the same fixed amount every month, but the split between interest and principal shifts over time. Early on, most of each payment covers interest on the large remaining balance; only a small slice reduces what you actually owe.
As the balance shrinks, the interest portion falls and more of each payment goes toward principal — so the loan pays down slowly at first, then faster near the end. This is why paying a little extra early, when interest dominates, can save more than the same extra paid later.
How the rate and term change your payment
The interest rate and the term pull your monthly payment in opposite directions. A higher rate raises both the monthly payment and the total interest. A longer term lowers the monthly payment because you spread the balance over more months — but you pay interest for longer, so the total cost goes up.
Take a $20,000 loan at 7%: it costs $617.54/mo over 3 years, $396.02 over 5 years, or $301.85 over 7 years. The longer term is easier on your monthly budget, but you keep paying interest the whole time, so you hand the lender more in the end. The trick is balancing a payment you can comfortably afford against the total you'll repay.
Before you borrow
A low monthly payment can hide an expensive loan. When you compare offers, look at the APR (which folds in many costs into one annual rate) and the total amount you'll pay, not just the monthly figure — a longer term almost always feels cheaper month to month while costing more overall.
Also check for origination fees, prepayment penalties, and whether the rate is fixed or variable, since those change the real cost. These results are educational estimates to help you ask better questions, not personalised financial advice.
How the monthly payment is calculated
M = P · r / (1 − (1 + r)^(−n)) (r = monthly rate, n = months)
M is the fixed monthly payment, and P is the principal — the amount you borrow.
r is the monthly interest rate: the annual rate divided by 12 (so 7% per year becomes about 0.00583 per month).
n is the total number of monthly payments — the term in years multiplied by 12 (5 years = 60).
Total interest is M × n − P, and total cost is M × n (everything you pay back across the full term).
| Loan amount | Monthly payment | Total interest | Total paid |
|---|---|---|---|
| $10,000 | $198.01 | $1,881 | $11,881 |
| $20,000 | $396.02 | $3,761 | $23,761 |
| $30,000 | $594.04 | $5,642 | $35,642 |
| $40,000 | $792.05 | $7,523 | $47,523 |
| $50,000 | $990.06 | $9,404 | $59,404 |