How the loan payment is calculated
For a fixed-rate loan, each monthly payment is the same and is found with the amortization formula. The monthly rate r is the annual rate divided by 12 and by 100, and n is the number of monthly payments (years × 12). The payment equals loan × r × (1 + r)^n ÷ ((1 + r)^n − 1). Total paid is the payment times n, and total interest is total paid minus the loan amount. When the rate is zero, the payment is simply the loan divided by the number of months.
Frequently asked questions
How is a monthly loan payment calculated?
For a fixed-rate loan, payment = L × r × (1 + r)^n ÷ ((1 + r)^n − 1), where L is the loan amount, r is the monthly rate (annual rate ÷ 12 ÷ 100), and n is the number of monthly payments.
What is total interest on a loan?
Total interest is the sum of every payment minus the original loan amount. It is the extra you pay for borrowing over the full term.
Does a longer term lower my payment?
Yes, a longer term spreads the loan over more months and lowers the monthly payment, but it usually increases the total interest paid.
Does this calculator include fees or insurance?
No. It estimates principal and interest only. Origination fees, taxes, and insurance are not included and would raise your real cost.
Is my financial information saved?
No. All math runs entirely in your browser. Nothing you enter is uploaded or stored.
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Disclaimer: This calculator is for general informational purposes only and is not financial advice. Estimates cover principal and interest only and exclude fees, taxes, insurance, and rate changes. Actual loan terms depend on your lender. Consult a qualified financial professional before borrowing.