Loan Calculator

Calculate monthly loan payments, total interest, and amortization

A loan calculator computes the monthly payment for a fixed-rate loan using the amortization formula M = P × r(1+r)ⁿ / ((1+r)ⁿ − 1), where P is principal, r is the monthly interest rate, and n is the number of payments. For example, a $250,000 mortgage at 6.85% over 30 years yields a monthly payment of about $1,638. Borrowers and home buyers use loan calculators to compare offers, plan budgets, and project total interest cost.

Reviewed by the CalcStation editorial team — Last updated June 2026

For informational purposes only. Calculations use standard formulas and do not account for fees, taxes, or your specific circumstances; consult a licensed financial advisor before making decisions.

$
Total amount to borrow
%
Yearly interest rate (APR)
years
Number of years to repay
$
Additional amount to pay each month toward principal
$
Large payment to make toward principal
years
Which year to make the one-time payment
Monthly Payment

$518.19

per month
Total Payment

$62,183.05

over loan term
Total Interest

$12,183.05

interest paid
Time to Pay Off

0 years

actual term
Interest Saved

$0.00

with extra payments
Loan Balance Over Time

A loan calculator helps you understand the true cost of borrowing money. Whether you're considering a mortgage, auto loan, or personal loan, knowing your monthly payment and total interest helps you make informed financial decisions. This calculator uses the standard amortization formula to give you accurate results.

Understanding Loan Calculations

A loan calculator helps you understand the true cost of borrowing money. Whether you're considering a mortgage, auto loan, or personal loan, knowing your monthly payment and total interest helps you make informed financial decisions. This calculator uses the standard amortization formula to give you accurate results.

How to Use This Calculator

Enter your loan amount, annual interest rate (APR), and the number of years for repayment. The calculator will instantly show your monthly payment, total amount paid over the life of the loan, and the total interest you'll pay. Use this to compare different loan options and find the best terms for your situation.

Loan Payment Formula

The loan payment is calculated using the standard amortization formula: M = P × [r(1+r)^n] / [(1+r)^n - 1], where M is the monthly payment, P is the principal (loan amount), r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the total number of monthly payments (years × 12). This formula ensures you pay off both principal and interest evenly over the loan term.

Mathematical Explanation

The loan payment is calculated using the standard amortization formula: M = P × [r(1+r)^n] / [(1+r)^n - 1], where M is the monthly payment, P is the principal (loan amount), r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the total number of monthly payments (years × 12). This formula ensures you pay off both principal and interest evenly over the loan term.

Frequently Asked Questions

Your monthly payment is calculated using the amortization formula, which divides your loan amount plus interest evenly across all payment periods. The formula considers your principal, interest rate, and loan term to ensure the loan is fully paid off by the end of the term.

APR (Annual Percentage Rate) is the yearly interest rate on your loan. A higher APR means you'll pay more interest over the life of the loan. Even a small difference in APR can result in thousands of dollars in additional interest on large loans like mortgages.

Shorter loan terms mean higher monthly payments but significantly less total interest paid. Longer terms have lower monthly payments but cost much more in interest over time. Choose based on your budget and long-term financial goals.

Most loans allow early payoff, which can save you thousands in interest. However, some lenders charge prepayment penalties. Check your loan terms before making extra payments. Even small additional payments can significantly reduce your total interest.

Fixed-rate loans maintain the same interest rate throughout the loan term, giving you predictable monthly payments. Variable-rate loans can change based on market conditions, potentially saving money when rates drop but risking higher payments when rates rise.

Resources & References

Encyclopedia Resources
Educational Resources