title: Loan Calculator description: Calculate monthly payments, total interest, and loan amortization for mortgages, auto loans, and personal loans
What is a Loan Calculator?
A Loan Calculator helps you understand the true cost of borrowing money. Calculate your monthly payment, total interest paid, and see how different loan terms affect your overall costs.
How Loan Calculations Work
The standard loan payment formula is:
M = P × [r(1+r)^n] / [(1+r)^n – 1]
Where:
- M = Monthly payment
- P = Principal (loan amount)
- r = Monthly interest rate (annual rate ÷ 12)
- n = Number of monthly payments
Types of Loans
Mortgage Loans
| Term | Typical Rate | Best For |
|---|---|---|
| 15-year | Lower rates | Faster payoff, less interest |
| 30-year | Standard rates | Lower monthly payments |
Auto Loans
| Term | Notes |
|---|---|
| 36 months | Lowest total interest |
| 60 months | Common balance |
| 72+ months | Lowest payment, most interest |
Personal Loans
| Type | Rate Range |
|---|---|
| Excellent credit | 6-12% |
| Good credit | 12-17% |
| Fair credit | 17-25% |
Example Calculations
$100,000 Mortgage at 6.5%
| Term | Monthly Payment | Total Interest |
|---|---|---|
| 15 years | $871 | $56,772 |
| 20 years | $746 | $79,047 |
| 30 years | $632 | $127,545 |
$25,000 Auto Loan at 7%
| Term | Monthly Payment | Total Interest |
|---|---|---|
| 36 months | $773 | $2,817 |
| 48 months | $599 | $3,727 |
| 60 months | $495 | $4,676 |
Frequently Asked Questions
How is monthly payment calculated?
We use the standard amortization formula that accounts for principal and compound interest over the loan term.
What's the difference between APR and interest rate?
APR includes the interest rate plus additional fees, giving you the true cost of borrowing.
Should I choose a shorter or longer term?
Shorter terms mean higher payments but significantly less total interest. Choose based on your budget and goals.
How does extra payment affect my loan?
Extra payments go directly to principal, reducing total interest and shortening your loan term.
Is the calculation accurate?
This calculator provides estimates based on standard amortization. Actual payments may vary based on fees, taxes, and insurance.
Tips for Getting Better Loan Terms
- Improve your credit score - Higher scores get lower rates
- Compare multiple lenders - Rates vary significantly
- Consider a shorter term - Save thousands in interest
- Make a larger down payment - Reduce principal and get better rates
- Avoid unnecessary add-ons - Dealer add-ons increase costs
Understanding Amortization
In the early years of a loan, most of your payment goes toward interest. Over time, more goes toward principal. This is called amortization.
Early vs Late Payments
| Payment # | Principal | Interest |
|---|---|---|
| 1st | Low | High |
| Midpoint | Equal | Equal |
| Last | High | Low |
When to Use This Calculator
- Before applying for a loan - Know what you can afford
- Comparing loan offers - See which is cheaper overall
- Refinancing - Determine if it's worth it
- Planning extra payments - Calculate savings