About Loan Calculator
Before you take on a mortgage, car loan or personal loan, three numbers tell you most of what you need: the monthly payment, the total interest and how long it runs. Enter the amount, the rate and the term, and these update as you type, along with a bar showing how much of what you pay goes to interest.
The schedule below shows where each payment goes, by year or by month. Early payments on a long loan are mostly interest, and seeing that is what makes the extra payment box worth a try: a modest monthly top-up can take years off the loan. You can download the schedule to use in a spreadsheet.
How it works
The payment comes from the standard amortization formula: M = P r (1 + r)^n / ((1 + r)^n - 1), where P is the amount, r is the annual rate divided by 12, and n is the number of months. A 0% loan is the amount divided by the months. Each month, the interest is the balance times r, rounded to the cent, and the rest of the payment reduces the balance. The final payment is adjusted to clear whatever rounding has left, so it is often slightly different from the others.
This assumes a fixed rate, one payment a month, interest calculated monthly, no missed payments, and no fees, insurance or taxes. Those assumptions are what the numbers are worth. Your lender's payment can differ: a mortgage payment often includes property tax and insurance, and fees added to a loan raise the amount borrowed. An extra monthly amount goes straight to the balance, and the payment stays the same until the loan is cleared.
How to use Loan Calculator
- Enter Loan amount, Interest rate (% a year), Term in years and, if needed, Plus months.
- Read the Monthly payment, then Total interest, Total paid and Paid off in.
- Try a figure in Extra each month to see the interest saved and how much sooner you finish.
- Under Payment schedule, switch between By year and By month, or press Download CSV.
A real run with the page's starting values
Loan amount: 200,000
Interest rate: 6.5% a year
Term: 30 yearsMonthly payment: $1,264.14
Total interest: $255,085.82
Total paid: $455,085.82
Paid off in: 30 yr
With 200 extra each month:
Total interest: $165,011.16
Paid off in: 20 yr 10 mo
The extra payment saves $90,074.66 in interest. You finish 9 yr 2 mo early.Over 30 years you pay more in interest than you borrowed. In the first month, $1,083.33 of the $1,264.14 is interest and only $180.81 reduces the balance. The last payment is $1,259.56, due to rounding along the way.
When it helps
- Finding what monthly payment a house price or car price leads to before you apply
- Comparing a 15 year term with a 30 year term, or two rates from different lenders
- Testing what an extra payment each month would do to an existing loan
- Getting a year-by-year schedule into a spreadsheet for your budget
Tips for a better result
- Compare the total cost as well as the monthly payment. A longer term lowers the payment and can add a lot of interest.
- Use the loan's interest rate here, not its APR. APR also folds in fees, so entering it counts those fees as interest and gives a payment that does not match your documents.
- Before paying extra, check that your lender applies it to principal and does not charge a prepayment fee. Terms differ by lender and country.
Good to know
- It is an estimate and not a loan offer. Your loan documents are the final word.
- Variable and adjustable rates are not modeled. The rate you enter applies for the whole term.
- Fees, insurance, property tax and escrow are not included. A mortgage payment you actually pay may be noticeably higher.
- Only monthly payments with interest calculated monthly are covered. Weekly or biweekly plans, interest-only periods and balloon loans are not. Canadian fixed-rate mortgages, for example, usually compound twice a year, so the payment here will be slightly off.
- Lenders round in different ways, so their figures can differ by a few cents or a little more.
- The extra payment is one fixed monthly amount. One-off lump sums are not supported.
Questions people ask
How is the monthly payment calculated?
With the standard amortization formula, using the annual rate divided by 12 and the number of months. For a 0% loan, it is just the amount divided by the months. On 12,000 over 24 months at 0%, that is 500 a month.
Why is so much of my early payment interest?
Interest each month is charged on the remaining balance, and at the start that balance is highest. As it falls, the interest falls too, and more of the same payment goes to the balance.
Should I enter the APR or the interest rate?
The interest rate, sometimes called the note rate. APR includes certain fees and is meant for comparing offers, so it does not produce the actual payment.
Does it include taxes and insurance?
No. It covers the amount you borrow and the interest on it. If your lender collects property tax or insurance with the payment, add those on top to get the full monthly figure.
What to use next
- Compound Interest Calculator: to compare with what the same money could earn if invested
- Percentage Calculator: for a down payment or a rate change
- Discount Calculator: if the price itself can still come down
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