Enter the loan amount, annual rate, and term to find the monthly payment and total interest.

Understanding loan payments

A fixed-rate loan is repaid with equal monthly installments, each one covering the interest due that month plus a slice of the principal. Early on, most of the payment is interest; later, more of it chips away at the balance. This structure is called amortization.

The term length is the key trade-off. Stretching a loan over more years lowers the monthly payment, which feels easier, but it means paying interest for longer and a higher total cost overall. This calculator shows the monthly payment alongside the total paid and total interest so you can weigh both.

The formula

M = P x i x (1+i)^N / ( (1+i)^N - 1 ), i = rate/12, N = 12 x years

Worked example

A 20,000 loan at 6% over 5 years has a monthly payment of about 386.66, with roughly 3,200 paid in interest.

How to read your result

This is the standard amortized payment, where each installment covers interest plus a slice of principal. A longer term lowers the monthly payment but raises total interest paid.

Frequently asked questions

Does this include fees or insurance?
No, it covers principal and interest only.
Why does a longer term cost more overall?
Because you pay interest for more months, even though each payment is smaller.
Is the rate the APR?
Use your loan annual interest rate; APR may differ if it includes fees.

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