Loan Payment Calculator
Enter the loan amount, the yearly interest rate and the term to see your monthly payment, the total interest and a year-by-year amortization table. Add an optional extra payment to see how much time and interest it saves.
Last updated November 3, 2026
Result
Monthly payment = $495.03
| Measure | Value |
|---|---|
| Monthly payment | $495.03 |
| Total of payments | $29,701.80 |
| Total interest | $4,701.80 |
| Year | Principal paid | Interest paid | Balance at year end |
|---|---|---|---|
| Year 1 | $4,327.45 | $1,612.91 | $20,672.55 |
| Year 2 | $4,640.28 | $1,300.08 | $16,032.27 |
| Year 3 | $4,975.73 | $964.63 | $11,056.54 |
| Year 4 | $5,335.42 | $604.94 | $5,721.12 |
| Year 5 | $5,721.12 | $219.24 | $0.00 |
Fixed rate, equal monthly payments, interest compounded monthly. Fees, insurance, taxes and your lender’s exact day-count rules can change the real payment.
Show the work
Formula: payment = P × r ÷ (1 − (1 + r)^−n), with r = annual rate ÷ 12 and n = months.
- You entered $25,000.00 at 7% a year for 5 years, so P = $25,000.00, r = 7% ÷ 12 = 0.5833% a month and n = 60.
- Payment: $25,000.00 × 0.005833 ÷ (1 − (1 + 0.005833)^−60) = $495.03.
- Total of payments: $495.03 × 60 = $29,701.80.
- Total interest: $29,701.80 − $25,000.00 = $4,701.80.
Result: Monthly payment = $495.03
How a loan payment is calculated
payment = P × r ÷ (1 − (1 + r)^−n)
P is the amount borrowed, r is the interest rate for one month (the yearly rate divided by 12) and n is the number of monthly payments. The formula finds the one level payment that pays off the balance exactly after n months, with interest charged on whatever is still owed each month.
With a rate of 0% there is no interest, so the payment is simply the amount divided by the number of months. The total interest is the payment times n, minus the amount you borrowed.
See how we calculate for the formulas, sources and review schedule behind every calculator.
Also useful alongside this calculator: Roth IRA Calculator, Sales Tax Calculator and Percentage Calculator.
How amortization works
Every payment is split in two. First the lender takes the interest for the month, which is the balance times the monthly rate. Whatever is left of the payment reduces the balance. Because the balance is largest at the start, early payments are mostly interest and later ones are mostly principal.
On the $25,000 loan at 7% over five years, the first year pays $4,327.45 of principal and $1,612.91 of interest. The fifth year pays $5,721.12 of principal and only $219.24 of interest. The table under the result shows this split for every year of your own loan.
How the term and the rate change the cost
A longer term lowers the monthly payment but raises the total interest, because the balance stays outstanding for longer. For $25,000 at 7%, a 36-month loan costs $771.93 a month and $2,789.39 in interest, while an 84-month loan costs $377.32 a month and $6,694.63 in interest.
The rate matters most on long loans. On $200,000 over 30 years, going from 6% to 7% raises the payment from $1,199.10 to $1,330.60 and the total interest from $231,676.38 to $279,017.80. Compare offers by total interest and by monthly payment, not by the payment alone.
What an extra monthly payment does
Money paid above the required amount goes straight to principal, so the next month’s interest is charged on a smaller balance. Adding $100 a month to the $25,000, 7%, five-year loan ends it after 49 payments instead of 60 and cuts the interest from $4,701.80 to $3,762.80.
Check first that your loan has no prepayment penalty and that your lender applies extra money to principal rather than to the next due date. Enter the extra amount in the calculator to see the new payoff time and the interest you would save.
What the payment does not include
The result covers principal and interest on a fixed-rate loan only. A mortgage payment usually adds property tax and insurance, and a car loan can include fees, taxes and add-ons that you finance. Loans with a variable rate, interest-only periods or a balloon payment follow different rules, and the real payment from a lender can differ by a few cents because of rounding and day-count conventions.
General information, not financial advice
This calculator gives a general estimate from the numbers you enter. It is not financial or tax advice, and your actual results can differ. Check important decisions with a qualified professional or the official source.
Sources
Official and primary sources for the statements on this page. Their authors have not reviewed or endorsed this page.
- Consumer Financial Protection Bureau, What is amortization and how could it affect my auto loan?. Explains that in an amortizing loan each payment is split between principal and interest, with more going to interest early in the term. The page is filed under auto loans but describes amortizing loans in general.
How to use the Loan Payment Calculator
- Enter the loan amount and the interest rate per year.
- Enter the term and choose years or months.
- Optionally add an extra payment you could make each month.
- Read the monthly payment, the total interest and the amortization table, then Copy, Print or Share.
Worked example
You borrow $25,000 at 7% for 5 years. The monthly rate is 0.07 ÷ 12 = 0.583333% and n = 60. The payment is $25,000 × 0.0058333 ÷ (1 − 1.0058333^−60) = $495.03. Over 60 payments you pay $29,701.80, of which $4,701.80 is interest.
| Term | Monthly payment | Total interest |
|---|---|---|
| 3 years | $771.93 | $2,789.39 |
| 4 years | $598.66 | $3,735.49 |
| 5 years | $495.03 | $4,701.80 |
| 6 years | $426.23 | $5,688.21 |
| 7 years | $377.32 | $6,694.63 |
Frequently asked questions
How do I calculate a monthly loan payment?
Multiply the amount by the monthly rate and divide by 1 minus (1 plus the monthly rate) to the power of minus the number of months. The calculator does this for you.
Is the interest rate the same as the APR?
Not always. The APR also includes certain fees. Enter the plain interest rate to get the payment, and use the APR only to compare the full cost of different offers.
Why is so much of my early payment interest?
Interest is charged on the balance, and the balance is highest at the start. As the balance falls, a larger share of each level payment goes to principal.
Does paying extra every month really help?
Yes, if the extra money reduces principal. It shortens the loan and cuts total interest, as the extra payment rows in the result show.
Are my numbers stored or sent anywhere?
No. The calculation runs in your browser and nothing you enter is saved or uploaded.