Loan calculator
Enter the amount you borrow, the yearly rate and the term to see the monthly payment and the interest you will pay. Add an extra amount each month to see how much sooner the loan ends.
This answer is for the example values in the boxes above. $25,000 borrowed at 7.5% a year for 5 years. Change the boxes to see your own answer.
This calculator does not round each payment to the cent, so its totals differ slightly from a schedule that does, as the amortization calculator's does. Fees and insurance are not in the payment.
How it works
Each month the lender charges interest on what you still owe, at one twelfth of the yearly rate. Your payment covers that interest first, and what is left lowers the balance. The balance is highest at the start, so the first payments are mostly interest, and each month a little more goes to the loan itself.
The calculator finds the one payment that brings the balance to zero after the last month. With a rate of 0 it is the amount divided by the number of months. It then adds up the payments to give the total and the interest.
An extra payment goes straight to the balance each month. The loan then ends before the last month, and the final payment is whatever is left.
A worked example
You borrow $25,000 at 7.5 percent for 5 years. The payment is $500.95 a month, you pay $30,056.92 in all, and $5,056.92 of that is interest.
In the first month the interest is $156.25, so only $344.70 of the payment lowers the balance. Add $100 a month and the loan ends after 49 months, which is 4 years and 1 month. The interest falls to $4,043.31, which is $1,013.61 less.
Interest rate and APR
Regulation Z defines the annual percentage rate as a measure of the cost of credit, expressed as a yearly rate. It relates the amount and timing of the value you receive to the amount and timing of your payments, which is why fees raise it. That makes it the number to use when you compare offers.
The payment, though, follows from the interest rate, so that is the one to enter here.
What the payment leaves out
Fees, insurance and taxes are not in it. If your lender adds a fee to the loan, add it to the amount you borrow.
Check your loan papers for a charge for paying early before you count on the extra-payment result. This calculator also assumes one rate for the whole term, so it does not handle a rate that can change.
Sources
- Regulation Z, 12 CFR § 1026.22, determination of the annual percentage rate, read on 2026-11-01.
Questions
How is the monthly payment on a loan calculated?
Each month the interest is the balance times the yearly rate divided by 12. The payment is the one amount that, paid every month, brings the balance to zero after the last month. The calculator finds it with the standard loan formula.
What is the difference between the interest rate and the APR?
The interest rate sets the interest charged on the balance. The APR also takes fees into account, so use it to compare offers and enter the interest rate here.
Why is so much of the first payment interest?
Interest is charged on the whole balance at the start. On $25,000 at 7.5% for 5 years, $156.25 of the first $500.95 payment is interest and $344.70 pays down the loan. The split moves toward the loan every month.
How much does an extra payment save?
On that $25,000 loan, an extra $100 a month ends it after 49 months and not 60, and cuts the interest from $5,056.92 to $4,043.31. That is $1,013.61 saved.
Can I use it for a personal loan or a student loan?
Yes, for any loan with a fixed rate and equal monthly payments. It does not fit a loan whose rate changes, or a credit card, which has no fixed payment.
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