Loan Calculator
Calculate monthly payments, total interest, and amortization schedule for loans.
Amortization Schedule (Yearly)
| Year | Beginning Balance | Total Paid | Interest Paid | Principal Paid | Ending Balance |
|---|
What is a Loan Calculator?
A loan calculator is a tool that estimates the fixed monthly payment, the total interest, and the total amount you will repay over the life of a loan. It works for any amortizing loan where the rate is fixed, including mortgages, auto loans, personal loans, and student loans.
The monthly payment is found with 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 monthly payments. The tool converts your annual rate into a monthly rate by dividing it by 100 and then by 12.
Because every payment is the same size, early payments are mostly interest and later payments are mostly principal. That shift is exactly what an amortization schedule records: for each period it splits the payment into interest and principal and shows the declining balance.
This calculator produces those numbers instantly and also renders a yearly amortization table, so you can see how the balance falls year by year. It uses only the principal and the interest rate; fees, insurance, and taxes are not part of a standard amortizing loan calculation.
Key Concepts
- Principal (P) — the amount borrowed, before any interest is added.
- Monthly rate (r) — the annual percentage rate divided by 100 and then by 12.
- Number of payments (n) — the loan term in years multiplied by 12 months.
- Monthly payment (M) — the fixed amount paid every month on an amortizing loan.
- Amortization — the gradual shift from interest-heavy to principal-heavy payments over time.
- Total interest — the sum of all monthly payments minus the original principal.
How to Use
- Enter the loan amount — type the total principal you plan to borrow.
- Enter the interest rate — input the annual percentage rate as a number such as 6.5.
- Enter the loan term — specify the duration in years, up to a maximum of 50.
- Read the results — the monthly payment, total interest, and total payment appear immediately.
- Study the schedule — the yearly amortization table breaks each year into beginning balance, payment, interest, principal, and ending balance.
Loan Formula Reference
| Term | Meaning | How it is derived |
|---|---|---|
| P | Principal | The loan amount you enter |
| r | Monthly interest rate | Annual rate ÷ 100 ÷ 12 |
| n | Number of payments | Loan term in years × 12 |
| M | Monthly payment | P × r × (1+r)n ÷ ((1+r)n − 1) |
| Total payment | Everything repaid | M × n |
| Total interest | Cost of borrowing | Total payment − P |
Worked Examples
- $300,000 mortgage at 6.5% for 30 years — the monthly payment is about $1,896.20, total payment about $682,632, and total interest about $382,632.
- $20,000 auto loan at 5% for 5 years — 60 payments give a monthly payment of about $377.42, total interest of about $2,645.20, and a total of about $22,645.
- $100,000 loan at 5% for 10 years — 120 payments produce a monthly payment of about $1,060.72, with total interest of roughly $27,286.
- $250,000 loan at 4% for 15 years — 180 payments give a monthly payment of about $1,849.19, total interest of roughly $82,854, and a total near $332,854.
- $10,000 loan at 7% for 3 years — 36 payments produce a monthly payment of about $308.73 and total interest of about $1,114.
- Reading the first year of the mortgage — of the roughly $22,754 paid in year one, about $19,402 goes to interest and only about $3,352 reduces the principal.
Tips and Common Mistakes
- Enter the annual rate, not the monthly rate — the tool divides the figure you type by 100 and then by 12, so 6.5 means 6.5 percent per year.
- Only principal and interest are included — property taxes, insurance, mortgage insurance, and arrangement fees are not part of this calculation.
- Longer terms lower the payment but raise total interest — stretching a loan to 30 years reduces the monthly amount while increasing the lifetime cost.
- All input values must be positive — a zero or blank amount, rate, or term shows an "enter valid values" message instead of results.
- The early years are interest-heavy — expect the principal balance to fall slowly at first and more quickly later in the term.
- Results are rounded for display — each figure is shown to two decimal places, so tiny differences from other calculators are normal.
Common Use Cases
Loan calculations help you answer the practical question of what a borrowing decision costs. Here are some situations where this tool is most useful.
- Mortgage planning — compare 15-year and 30-year terms and see the difference in total interest.
- Car financing — estimate the monthly payment for a dealer or bank auto loan before signing.
- Personal loans — work out the cost of consolidating debt or funding a home project.
- Student loans — project repayment amounts after graduation at different rates and terms.
- Refinancing decisions — check whether a lower rate or shorter term actually saves money overall.
- Budgeting — build a monthly budget around a fixed payment you can comfortably afford.
Frequently Asked Questions
How is the monthly payment calculated?
The tool uses M = P × r × (1+r)n ÷ ((1+r)n − 1), where P is the principal, r is the monthly rate (annual rate ÷ 100 ÷ 12), and n is the number of monthly payments.
What is an amortization schedule?
An amortization schedule shows how each payment splits into principal and interest, along with the remaining balance. Early payments are mostly interest, while later payments are mostly principal.
Can I use this for any loan type?
Yes. It works for mortgages, auto loans, personal loans, and student loans, in fact any fixed-rate amortizing loan with equal monthly payments.
Do I enter an annual or a monthly interest rate?
Enter the annual percentage rate, such as 6.5 for 6.5 percent per year. The calculator converts it to a monthly rate by dividing by 100 and then by 12.
Does the result include taxes, insurance, or fees?
No. The calculation covers principal and interest only. Property taxes, homeowner insurance, mortgage insurance, and application fees are not included.
Why is most of my early payment interest?
Interest is charged on the outstanding balance. Because the balance is largest at the start, the interest portion of each payment is highest in the early years and shrinks as the loan is paid down.
What happens if the formula cannot be computed?
All three fields must be greater than zero, otherwise the tool shows an enter valid values message. If the payment formula ever returns a non-finite result, the tool falls back to dividing the principal evenly across all months.
Is this tool free to use?
Yes. All processing happens entirely in your browser, so no data is sent to any server and you can compare as many loan scenarios as you like.