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Loan Payment Calculator

Calculate your monthly payment and view a complete amortization schedule for any fixed-rate loan.

By Drew Budwin · Last updated July 2026 · Methodology

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How We Calculate This

Why Early Payments Are Mostly Interest

Interest is charged on the outstanding balance, which is highest at the start. As you pay down principal, each month's interest charge shrinks and more of the fixed payment goes toward principal. Paying extra early cuts more total interest than the same amount paid later.

Worked Example: $25,000 at 6% for 5 Years

Monthly rate r = 0.5%, n = 60 payments. M = $483.32. Over 60 payments you pay $28,999 total; interest is $3,999, about 16% of what you borrowed. Month 1: $125 interest, $358.32 principal. Month 60: $2.40 interest, $480.92 principal.

Loan Payment Calculator Formula

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 divided by 12), and n is the total number of payments. This formula ensures each payment covers both interest and principal so the loan is fully repaid by the end of the term.

How to Use This Calculator

  1. Enter the total Loan Amount you are borrowing.
  2. Enter the Annual Interest Rate (e.g., 5 for 5%).
  3. Enter the Loan Term in years.
  4. Click Calculate Payment to see your monthly payment, total paid, total interest, and a full amortization schedule.

Frequently Asked Questions

What is an amortization schedule?

An amortization schedule is a month-by-month breakdown of each loan payment. It shows how much of each payment goes toward interest versus principal, and your remaining balance after each payment. Early in the loan, a larger share of each payment goes to interest.

Why does so much of my early payments go to interest?

Interest is calculated on the outstanding balance. At the start of the loan, your balance is at its highest, so the interest charge each month is larger. As you pay down the principal, the interest portion of each payment shrinks and more money goes toward reducing your balance.

Can I use this calculator for a mortgage?

Yes. This calculator works for any fixed-rate loan, including mortgages, auto loans, personal loans, and student loans. Keep in mind that actual mortgage payments may also include property taxes, insurance, and PMI, which are not included in this calculator. To see how extra payments can shorten your mortgage, try the mortgage payoff calculator.

What happens if my interest rate is 0%?

If your interest rate is 0%, your monthly payment is simply the loan amount divided by the total number of months. There is no interest charge, so 100% of every payment goes directly to paying off the principal. This is common with promotional financing offers.

How does a longer loan term affect total interest paid?

A longer loan term lowers your monthly payment but increases the total interest paid over the life of the loan. For example, a $25,000 loan at 6% costs about $3,100 in interest over 3 years but about $5,800 over 5 years.

What is the difference between APR and interest rate?

The interest rate is the cost of borrowing the principal. The APR (Annual Percentage Rate) includes the interest rate plus other fees like origination charges. This calculator uses the interest rate; check your loan terms for the APR to compare total borrowing costs.

Do biweekly payments save money compared to monthly payments?

Yes. Paying half your monthly payment every two weeks adds up to 26 half-payments per year, or 13 full payments instead of 12. That one extra payment per year reduces principal faster and cuts total interest. On a $25,000 loan at 6% over 5 years, biweekly payments save roughly $150 in interest and shorten the payoff by about a month. This calculator assumes monthly payments; use the mortgage payoff calculator to model extra payment scenarios.

Is it better to pay off a loan early or invest the extra money?

It depends on the rate. If your loan rate exceeds your expected investment return, paying it off early wins. If your investment return exceeds the loan rate, investing is mathematically better. A 6% loan versus the stock market's historical 7%–10% average is close enough that the guaranteed certainty of debt-free is a legitimate tiebreaker. High-rate debt (above 8%–10%) almost always favors early payoff.

Can I use this calculator for a variable-rate loan?

This calculator assumes a fixed rate for the entire term. For a variable-rate loan, recalculate each time your rate adjusts: use the remaining balance as the new principal, your remaining months as the new term, and the updated rate. Running this repeatedly each adjustment period gives you the most accurate payment projection.

How does the loan amount affect total interest paid?

Total interest roughly doubles when you double the principal, assuming the same rate and term. Borrowing $50,000 at 6% for 5 years costs about twice the interest of a $25,000 loan. Lenders sometimes adjust rates for loan size, so the relationship isn't perfectly linear, but this calculator lets you test any principal by changing one field.

Further Reading

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