Loan Calculator
Calculate monthly payments, total interest, and amortization for personal, auto, and installment loans. Includes extra payment options.
How to Use the Loan Calculator
1. Enter the loan amount — the total amount you are borrowing.
2. Set the interest rate — use the APR quoted by your lender, not the promotional rate.
3. Choose the term — longer terms lower the monthly payment but increase total interest.
4. Try an extra payment — see the interest you save by paying a little more each month.
The Loan Amortization Formula
M = monthly payment, P = loan principal, r = monthly interest rate, n = number of payments. This is the same formula behind mortgages, auto loans, and EMIs (equated monthly installments) — the only difference is the principal, rate, and term you enter.
Frequently Asked Questions
How do I calculate a monthly loan payment?
Use the amortization formula M = P × [r(1+r)^n] ÷ [(1+r)^n − 1], where P is the loan amount, r is the monthly interest rate, and n is the number of months. This gives the fixed payment that pays the loan off exactly at the end of the term.
What is the difference between simple and amortized interest?
Simple interest is charged only on the original principal. Amortized interest is charged on the remaining balance each month, so you pay interest on a shrinking balance. Most personal, auto, and mortgage loans are amortized.
Does paying off a loan early save money?
Yes. Because amortized interest is calculated on the remaining balance, paying extra principal reduces the balance faster and lowers the total interest you pay. Always check whether your lender charges a prepayment penalty first.
What is a good interest rate for a personal loan?
As of 2026, personal loan APRs typically range from about 6% to 36% depending on credit score, income, and loan term. Rates vary widely by lender and country — use the calculator with the rate you are quoted, then compare total interest across offers.