How to Use the Loan Calculator
Our free loan calculator uses the standard amortization formula to compute your monthly payment, total interest, and full payment schedule for any installment loan — auto loan, personal loan, student loan, or mortgage. Enter the loan amount, annual interest rate, and term in years, then press Calculate. Results appear instantly alongside a month-by-month amortization table.
Loan Payment Formula
For a fixed (amortized) loan, the monthly payment formula is:
M = P × [r(1+r)^n] / [(1+r)^n − 1]
- M — Monthly payment
- P — Principal (amount borrowed)
- r — Monthly rate = annual rate ÷ 12
- n — Number of payments = years × 12
3 Real-World Loan Examples
$20,000 at 5.9% for 5 years → $386/month, $3,160 total interest. Choosing a 3-year term instead cuts interest to $1,845 but raises the payment to $607/month.
$10,000 at 11.5% for 3 years → $330/month, $1,875 total interest. If you were carrying that same balance on a credit card at 24% APR with minimum payments, you could pay $3,900+ in interest and take 7+ years to pay it off.
$300,000 at 7.0%: a 30-year term costs $1,996/month and $418,500 in interest. A 15-year term costs $2,696/month but only $185,400 in interest — saving you $233,100 over the life of the loan.
Tips to Pay Off Your Loan Faster
- Make one extra payment per year — applied entirely to principal, this can cut 4–6 years off a 30-year mortgage.
- Round up your monthly payment — even an extra $50/month makes a meaningful difference.
- Refinance when rates drop — even 0.5% lower can save thousands.
- Avoid interest-only loans unless you have a clear exit strategy; you build no equity.
Understanding Your Amortization Schedule
In the early months of a loan, most of your payment covers interest. As the balance shrinks, more goes toward principal. This is why extra payments early in the loan have the biggest impact on total interest savings. Use the table generated above to find the breakeven point and decide when to refinance or make lump-sum payments.