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Loan Payment Calculator
Estimate a monthly loan payment, total paid, and total interest from loan amount, annual interest rate, and term. Use this for fixed-rate amortized loans where each scheduled payment pays both principal and interest.
Result
- Monthly payment
- $1,580.17
- Total paid
- $568,861.22
- Total interest
- $318,861.22
Principal and interest payment only.
How loan payment calculation works
This loan payment calculator converts the annual interest rate into a monthly rate and converts the loan term into the number of monthly payments.
If the rate is zero, payment is simply principal divided by the number of payments. Otherwise, it uses the standard fixed-rate amortization formula to estimate a level monthly principal-and-interest payment.
The result includes monthly payment, total paid, and total interest. It does not include taxes, insurance, origination fees, PMI, HOA dues, late fees, or variable-rate adjustments unless those costs are already included in the loan amount.
Useful next steps
- Check total loan interest before choosing a longer term only for a lower monthly payment.
- Use monthly to yearly income to compare recurring income with a loan payment.
- Read how loan payments work for principal, rate, term, total paid, and total interest definitions.
- Compare simple interest vs loan payments when deciding whether simple interest or amortized payment math fits the scenario.
Loan payment formula
monthlyRate = annualRatePercent / 100 / 12; numberOfPayments = years * 12; payment = P * [r(1+r)^n] / [(1+r)^n - 1]The formula estimates the fixed monthly payment for an amortizing loan. Total paid is monthly payment multiplied by number of payments, and total interest is total paid minus principal.
- P is principal.
- r is the monthly interest rate.
- n is the number of monthly payments.
- When r is 0, payment equals principal divided by n.
What the Numbers Mean
- Loan amount
- The principal borrowed before interest. Include financed fees only if you want them treated as part of the loan amount.
- Annual interest rate
- The yearly rate used to calculate monthly interest. The calculator does not separately model APR fees.
- Loan term
- The repayment length in years. Longer terms usually lower payment but increase lifetime interest.
- Total interest
- The estimated amount paid above principal if all scheduled payments are made as modeled.
Assumptions
- The loan has a fixed annual interest rate.
- Payments are monthly and made on schedule.
- The estimate is principal and interest only.
- Taxes, insurance, origination fees, escrow, late fees, prepayment penalties, and variable-rate changes are excluded.
- The calculator summarizes payment, total paid, and total interest, but does not generate a full amortization schedule.
Worked Examples
Thirty-year loan
- Input
- $250,000 principal, 6.5% annual rate, 30 years
- Formula
- P = 250,000, r = 0.065 / 12, n = 360
- Output
- $1,580.17 monthly payment
The formula uses a monthly rate of about 0.5417% across 360 payments.
Zero-rate loan
- Input
- $12,000 principal, 0% annual rate, 5 years
- Formula
- $12,000 / 60 payments
- Output
- $200 monthly payment
With no interest, 12,000 divided by 60 payments equals 200.
Five-year personal loan
- Input
- $18,000 principal, 9% annual rate, 5 years
- Formula
- P = 18,000, r = 0.09 / 12, n = 60
- Output
- $373.65 monthly payment
The loan is paid over 60 monthly payments using the amortization formula.
Common Fixed-Rate Loan Payment Examples
These examples use standard monthly amortization and show principal-and-interest payment only.
| Example | Rate | Term | Monthly payment | Total interest |
|---|---|---|---|---|
| $10,000 loan | 6% | 3 years | $304.22 | $951.90 |
| $20,000 loan | 8% | 5 years | $405.53 | $4,331.67 |
| $25,000 loan | 11% | 5 years | $543.56 | $7,613.63 |
| $30,000 loan | 6.9% | 5 years | $592.62 | $5,557.29 |
| $250,000 loan | 6.5% | 30 years | $1,580.17 | $318,861.22 |
Taxes, insurance, escrow, origination fees, late fees, and variable-rate changes are not included.
How Rate and Term Change the Payment
The same principal can produce very different monthly payments and total interest depending on the rate and term.
Shorter term
$20,000 loan, 6% annual rate, 3 years
$608.44/month and $1,903.79 interest
The payment is higher, but the loan is repaid faster and total interest is lower.
Longer term
$20,000 loan, 6% annual rate, 5 years
$386.66/month and $3,199.36 interest
The payment is lower, but interest accrues for more months.
Higher rate
$20,000 loan, 10% annual rate, 5 years
$424.94/month and $5,496.45 interest
A higher rate raises both the monthly payment and the lifetime borrowing cost.
Common Loan Payment Misreads
A monthly payment estimate is useful only when the loan structure matches the assumptions.
Reading principal and interest as the full bill
Mortgages, auto loans, and personal loans can include taxes, insurance, fees, escrow, warranties, or add-ons that are not included unless they are part of the loan amount.
Choosing a longer term only for the lower payment
A longer term can reduce the monthly payment while increasing total interest. Check total paid before deciding that a lower payment is cheaper.
Using fixed-rate math for variable-rate debt
This calculator assumes the rate is fixed. Adjustable-rate, interest-only, balloon, deferred-payment, or irregular-payment loans need a different model.
Related Guides for Loan Payments
Use these pages when the decision depends on payment mechanics or total interest cost.
Frequently Asked Questions
How do I calculate a monthly loan payment?
Use loan amount, annual interest rate, and term. The calculator converts the rate and term into monthly values, then applies the fixed-rate amortization formula.
Does this include taxes and insurance?
No. The payment is principal and interest only. Property taxes, insurance, HOA fees, and other charges are excluded.
Can this handle a zero interest rate?
Yes. If the annual rate is 0, the calculator divides principal by the number of monthly payments.
Is the result an amortization schedule?
No. It estimates the fixed monthly payment, total paid, and total interest, but it does not list each monthly balance.
Does this show total interest?
Yes. Total interest is estimated as total paid across all scheduled payments minus the original loan amount.
Why is total interest higher on longer loans?
Longer terms spread payments over more months. Even when the monthly payment is lower, interest has more time to accrue.
Can I use this for a mortgage?
It can estimate principal and interest, but a full mortgage payment may also include property taxes, homeowners insurance, PMI, HOA dues, and escrow changes.
When should this not be used?
Do not use it for adjustable-rate loans, interest-only periods, balloon payments, fees financed into the loan, or irregular payment schedules.
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Disclaimer
This calculator estimates principal and interest only. It does not constitute lending, mortgage, tax, legal, or financial advice.