Calculate your monthly payment, total interest, and full amortization schedule for any loan.
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Enter your loan amount, the annual interest rate offered by your lender, and the loan term. Toggle between years and months depending on how your loan is structured. The calculator instantly shows your monthly payment, total amount paid over the life of the loan, and total interest charged.
The amortization schedule shows a month-by-month breakdown of how each payment is split between principal and interest, and how your remaining balance decreases over time.
A loan is an agreement to borrow a sum of money (the principal) and repay it over time with interest. Understanding how loan calculations work helps you compare offers, plan your budget, and make more informed borrowing decisions. The mathematics of loans might seem complex, but the core formula is straightforward once you know what drives your monthly payment.
The loan payment formula: The standard formula for a fixed-rate monthly payment is M = P[r(1+r)^n] / [(1+r)^n − 1], where P is the principal loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments (years × 12). This formula ensures that each payment covers the current month's interest while steadily reducing the principal balance toward zero.
How amortization works: In the early months of a loan, the majority of each payment goes toward interest rather than principal. As the balance decreases, the interest portion shrinks and more of each payment reduces the principal. This front-loading of interest is why refinancing a mortgage after just a few years often makes financial sense when rates drop significantly — you restart the amortization schedule but at a lower rate. Our amortization table shows exactly how this plays out month by month.
The real cost of borrowing: The total interest paid over the life of a loan can be staggering. A $300,000 mortgage at 7% over 30 years results in total payments of approximately $718,000 — more than twice the principal. Making even modest extra payments toward the principal can dramatically reduce this. An extra $200 per month on that same loan would save over $80,000 in interest and cut the loan term by about 6 years.
Fixed vs variable rate loans: Fixed-rate loans lock in your interest rate for the full term, providing payment certainty. Variable (or adjustable) rate loans start at a lower rate that adjusts periodically based on market benchmarks. Variable rates can save money if interest rates fall but create payment uncertainty and risk if rates rise. Our calculator models fixed-rate scenarios; for variable loans, use it to model the payment at each potential rate to understand your risk range.
Comparing loan offers: When comparing loans, look beyond the interest rate to the Annual Percentage Rate (APR), which includes fees and better reflects the true cost of borrowing. A loan with a slightly higher rate but lower fees may be cheaper overall for a short-term loan. For long-term loans, the rate matters more than fees because you are paying that rate for decades.