Loan Calculator
Calculate loan payments and view amortization schedules.
How to Use the Loan Calculator
The Loan Calculator uses standard amortization math to calculate your monthly payment for any fixed-rate loan. Whether you're shopping for a mortgage, an auto loan, a personal loan, or a student loan, this tool shows you your monthly payment, the total amount you'll pay, and how much of that is interest.
The Loan Formula
The monthly payment is calculated using the standard amortization formula: M = P × r(1+r)ⁿ / ((1+r)ⁿ − 1), where P is the principal, r is the monthly interest rate (annual rate ÷ 12), and n is the number of monthly payments. This formula ensures each monthly payment covers the accrued interest plus a portion of the principal, with the principal portion growing over time.
Reading the Amortization Schedule
The amortization table shows the first 12 months of your loan in detail. For each month, you can see the total payment, how much goes toward principal, how much is interest, and the remaining balance. In the early months of a mortgage, most of your payment goes toward interest. Over time, the interest portion decreases and the principal portion increases — this is the effect of amortization.
Tips for Reducing Total Interest
Even small additional principal payments dramatically reduce the total interest paid over the life of a loan. For example, on a $300,000 30-year mortgage at 7%, paying just $100 extra per month saves over $25,000 in interest and pays off the loan almost 3 years early. Use this calculator to model different scenarios by comparing different terms (e.g., 15-year vs. 30-year mortgage) or different down payment amounts.
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Frequently Asked Questions
What type of interest does this calculator use?
This calculator uses simple amortizing interest, which is the standard method for mortgages, auto loans, and most personal loans. Interest is calculated on the remaining balance each month, so your interest charges decrease over time as you pay down the principal. This differs from simple interest (calculated only on the original principal) or compound interest (interest accruing on interest).
Does this include taxes and insurance?
No. This calculator shows principal and interest (P&I) only. For mortgages, your actual monthly payment will typically be higher because it includes property taxes and homeowner's insurance (collectively called PITI — Principal, Interest, Taxes, Insurance). If required, private mortgage insurance (PMI) adds further to the payment. Contact your lender for a complete payment estimate.
How do I calculate a loan with a 0% interest rate?
Enter 0 in the Annual Interest Rate field. The calculator will simply divide the loan amount by the number of months, giving you equal installment payments with no interest. For example, a $12,000 car loan at 0% for 24 months would be $500/month.
What's the difference between APR and interest rate?
The interest rate is the cost of borrowing the principal loan amount. APR (Annual Percentage Rate) includes the interest rate plus other loan fees and costs (origination fees, points, etc.), expressed as a yearly rate. For accurate payment calculation, use the loan's interest rate (not APR). APR is more useful for comparing the total cost of different loan offers.
Why does most of my early payment go toward interest?
In an amortizing loan, monthly interest is calculated on the outstanding balance. Early in the loan, the balance is at its maximum, so interest charges are high. As you pay down the principal, the balance decreases, and so does the monthly interest. By the end of the loan, most of your payment is principal. This front-loading of interest is why paying off a loan early saves substantial money.