Loan Calculator
How to Use
Enter the loan amount, annual interest rate, and loan term in years. The monthly payment, total payment, and total interest are calculated instantly.
What is Loan Amortization?
Loan amortization is the process of paying off a debt through regular, fixed installments over a set period. Each payment covers both principal and interest. In the early stages of the loan, a larger portion of each payment goes toward interest, while later payments contribute more to reducing the principal balance. Understanding amortization helps borrowers see exactly how much they will pay in interest over the life of the loan and how extra payments can shorten the term and reduce total costs.
Calculation
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, and n is the total number of payments.
Common Use Cases
- Mortgage planning — estimate monthly payments before buying a home and compare 15-year vs. 30-year terms
- Auto loans — calculate total cost of financing a vehicle at different interest rates
- Student loans — understand repayment timelines and total interest for education debt
- Personal loans — compare offers from different lenders to find the best deal
- Refinancing — see how refinancing at a lower rate reduces your total payments
Tips for Comparing Loans
When comparing loan offers, focus on the total payment rather than just the monthly amount. A longer term lowers monthly payments but increases total interest significantly. Even a small difference in interest rate — say 0.5% — can add up to thousands over a 30-year mortgage. Try running several scenarios with different terms and rates to find the best balance between affordability and total cost.
Privacy
All processing happens in your browser. No data is sent to any server.
FAQ
Are my loan amount and income figures sent to any server?
No. Every calculation runs entirely in your browser using a simple formula — nothing you enter is uploaded, logged, or stored. Your financial figures stay on your device.
How is the monthly payment calculated?
It uses 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 total number of monthly payments (years × 12).
Why does a longer term lower my monthly payment but cost more overall?
A longer term spreads the principal over more payments, so each one is smaller, but interest accrues for more months. That's why the Total payment and Total interest figures rise even as the monthly amount falls — compare those, not just the monthly number.
Does this calculator account for fixed vs. variable rates, taxes, or fees?
No. It assumes a single fixed annual rate with equal monthly installments and does not model rate changes, property taxes, insurance, or origination fees. Treat the result as a baseline estimate.
Can I use it for mortgages, auto loans, and student loans alike?
Yes. Any standard amortizing loan with fixed equal payments works the same way — just enter the principal, annual rate, and term in years to compare scenarios across loan types.