Loan payment calculator: what will a loan cost each month and in total?
Enter the amount, the annual rate and the term to see the fixed monthly payment and how much of your money goes to interest rather than the loan itself.
Education only, not investment, tax or legal advice. Crypto-assets are high-risk — risk disclosure.
The short answer
For a fixed-rate loan repaid in equal monthly instalments, the payment is P × r ÷ (1 − (1 + r)^−n), where P is the amount borrowed, r the monthly rate and n the number of months. Multiply the payment by n to get the total repaid; subtract P for total interest.
Key takeaways
- A fixed monthly payment is set so the loan reaches zero exactly at the end of the term.
- Early payments are mostly interest; later payments are mostly principal. This is called amortization.
- A longer term lowers the monthly payment but raises the total interest you pay.
- Compare loan offers by APR, term and total cost, not by the monthly payment alone.
How do you use the loan payment calculator?
Three numbers in, three numbers out
- 1
Loan amount
Enter the amount you will actually borrow, after any down payment or trade-in.
- 2
Annual interest rate
Enter the yearly rate from the offer. A lender's APR adds its fees on top of the interest rate4, so the two can differ; try both to see the range.
- 3
Term in months
Enter the repayment period: 60 for five years, 360 for a 30-year mortgage.
The result shows the monthly payment, the total you will pay over the whole term and the part of that total that is interest. It assumes a fixed rate, equal monthly payments and no missed or extra payments.
What formula does the loan calculator use?
Lenders use a standard formula to set a payment that splits each instalment between interest and principal so the loan is paid off exactly at the end of the term1. The calculator uses the usual annuity version of it:
M = P × r ÷ (1 − (1 + r)^−n)
- M is the monthly payment.
- P is the principal, the amount borrowed.
- r is the monthly rate: the annual rate divided by 12, as a decimal (6.9% becomes 0.00575).
- n is the number of monthly payments.
Total paid is simply M × n, and total interest is that figure minus P. If the rate is zero the formula reduces to P ÷ n: $25,000 over 60 months is $416.67 a month with no interest.
You can check the calculator against a public example. The CFPB shows a $20,000 auto loan at 4.75% across four terms3; our results match its figures to within a dollar.
$20,000 at 4.75%: calculator results versus the CFPB's published figures (CFPB rounds to whole dollars) Source: [3]
| Months | Payment | Interest | CFPB figures |
|---|---|---|---|
| 36 | $597.18 | $1,498.32 | $597 / $1,498 |
| 48 | $458.32 | $1,999.57 | $458 / $1,999 |
| 60 | $375.14 | $2,508.29 | $375 / $2,508 |
| 72 | $319.78 | $3,024.48 | $320 / $3,024 |
Worked example: what does $25,000 at 6.9% for five years cost?
Worked example
A five-year loan (illustrative)
Enter 25000, 6.9 and 60. The calculator returns a monthly payment of $493.85, a total paid of $29,631.08 and total interest of $4,631.08.
In month one, interest is $25,000 × 0.00575 = $143.75, so only $350.10 of the payment reduces the balance. Stretch the same loan to 72 months and the payment falls to $425.03, but total interest rises to $5,601.85.
Selected months of the schedule: every payment is $493.85 (unrounded in the calculation, so a lender's schedule may differ by cents)
| Month | Interest | Principal | Balance |
|---|---|---|---|
| 1 | $143.75 | $350.10 | $24,649.90 |
| 2 | $141.74 | $352.11 | $24,297.78 |
| 3 | $139.71 | $354.14 | $23,943.65 |
| 30 | $80.42 | $413.43 | $13,572.39 |
| 60 | $2.82 | $491.03 | $0.00 |
The schedule shows amortization at work. The CFPB describes the same pattern: more of each payment goes to interest early on and more to principal toward the end, so the balance falls slowly at first and faster later2.
What does the loan calculator leave out?
- Fees and add-ons. Origination fees, points or extras rolled into the loan raise the cost. That is why the CFPB suggests comparing APR as well as the interest rate4.
- Variable rates. If the rate can change, the payment and total interest can change too. The calculator holds the rate fixed.
- Rounding. Lenders round payments to the cent and may adjust the final payment, so totals can differ slightly.
- Extra or late payments. Paying more cuts interest; paying late can add charges. Check the loan contract for prepayment and late-fee terms.
- Your wider finances. The calculator says what a loan costs, not whether you can afford it.
Risk warning
Look past the monthly payment
A longer term can make a loan look cheaper each month while costing more overall3. Before signing, compare the amount borrowed, APR, term and total repaid side by side, and be wary of borrowing to buy volatile assets such as crypto. See our risk disclosure.
Common beginner mistakes
Shopping by monthly payment
A lower payment often just means a longer term and more total interest.
Using an annual rate as a monthly one
The formula needs the monthly rate: divide the annual rate by 12 first.
Ignoring the APR
Two loans with the same interest rate can carry different fees. The APR captures them4.
Frequently asked questions
Why do I pay so much interest at the start of a loan?
Interest is charged on the balance you still owe. The balance is highest at the start, so the interest share of each payment is highest then1.
Does paying extra each month save money?
Usually, because extra money reduces the balance that interest is charged on1. Check first whether your lender charges a prepayment penalty.
Can I use this for a mortgage?
Yes, for the principal-and-interest part of a fixed-rate mortgage. Other costs that may be collected with a mortgage payment are not included.
Does it work for buy now, pay later plans?
Only if the plan charges interest and has equal monthly instalments. Many such plans use a few interest-free instalments with fees instead; see our buy now, pay later explainer.
The bottom line
A loan payment is fixed arithmetic: amount, monthly rate and number of months. The calculator shows the payment, the total repaid and the interest, and the schedule shows why early payments barely dent the balance. Compare offers on APR, term and total cost, and treat the monthly figure as only one part of the price.
Sources
- How does paying down a mortgage work? — Consumer Financial Protection Bureau Primary source
- What is amortization and how could it affect my auto loan? — Consumer Financial Protection Bureau Primary source
- How do I compare auto loan offers? What should I look at besides the monthly payment? — Consumer Financial Protection Bureau, 2024 Primary source
- What is the difference between a loan interest rate and the APR? — Consumer Financial Protection Bureau Primary source
How we checked this page: every figure above links to the numbered source it came from. Spotted an error? Tell the desk — see our editorial policy.
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