Loan Calculator
Work out the monthly payment on a fixed-rate loan, plus what it costs in total and how much of that is interest.
How a loan payment is worked out
A fixed-rate loan is repaid in equal monthly instalments over its term. Each payment covers the interest due that month first, and the rest reduces the balance — so early payments are mostly interest and later ones mostly principal. This is called amortization.
The payment comes from a standard formula: M = P·r·(1+r)ⁿ ⁄ ((1+r)ⁿ − 1), where P is the amount borrowed, r is the monthly rate (annual rate ÷ 12), and n is the number of months. Multiply the payment by the number of months to get the total repaid; subtract the amount borrowed to see the interest.
This estimate covers principal and interest at a constant rate. It excludes fees, insurance, and any rate changes on a variable loan, and it assumes every payment is made on time. Your lender's figure is the one that governs — treat this as a planning estimate, not an offer.
Sources: CFPB — Loan options, Investor.gov — Compound interest (SEC)
Frequently asked questions
Why is so much of an early payment interest?
Interest is charged on the outstanding balance, which is largest at the start. As the balance falls, the interest portion of each fixed payment shrinks and the principal portion grows.
What lowers the total interest most?
A lower rate, a shorter term, or a smaller amount borrowed. A shorter term raises the monthly payment but usually cuts total interest sharply, because the balance is cleared faster.
Does this include fees or insurance?
No. It shows principal and interest only. Origination fees, insurance, and taxes are extra and vary by lender and product, so always compare a lender's full APR and disclosures.
Is the rate here APR?
Enter the loan's nominal annual interest rate. APR also folds in certain fees, so a loan's APR can be higher than its interest rate — use APR to compare offers like for like.
