Loan Calculator
Calculate loan payments, total interest, and amortization schedules. Compare different loan terms and see how extra payments can save money.
Calculator
Enter your information to calculate results
Payment Schedule (Sample)
| Month | Payment | Principal | Interest | Balance |
|---|---|---|---|---|
| 1 | $1,580 | $226 | $1,354 | $249,774 |
| 2 | $1,580 | $227 | $1,353 | $249,547 |
| 3 | $1,580 | $228 | $1,352 | $249,318 |
| 4 | $1,580 | $230 | $1,350 | $249,089 |
| 5 | $1,580 | $231 | $1,349 | $248,858 |
| 6 | $1,580 | $232 | $1,348 | $248,625 |
How It Works
The loan calculator uses the standard loan payment formula to calculate monthly payments, total interest, and amortization schedules.
Loan Payment Formula
M = P × [r(1+r)^n] / [(1+r)^n - 1]
Where:
- M = Monthly payment
- P = Principal loan amount
- r = Monthly interest rate (annual rate ÷ 12)
- n = Total number of payments (years × 12)
Key Concepts
- Principal: The original loan amount
- Interest: The cost of borrowing money
- Amortization: Gradual loan repayment through scheduled payments
- Extra Payments: Additional payments that reduce principal and save interest
Examples
Example 1: Home Mortgage
Loan Amount: $300,000
Interest Rate: 6.5%
Term: 30 years
Monthly Payment: $1,896
Total Interest: $382,633
Example 2: Auto Loan
Loan Amount: $25,000
Interest Rate: 4.5%
Term: 5 years
Monthly Payment: $466
Total Interest: $2,948
Extra Payment Benefits
Adding just $100 extra per month to a $250,000 mortgage at 6.5% for 30 years can:
- Save over $67,000 in interest
- Pay off the loan 6 years earlier
- Build equity faster
Compare
Loan Shopping Tips:
- Compare APR: Annual Percentage Rate includes fees and gives true cost comparison
- Consider Term Length: Shorter terms mean higher payments but less total interest
- Down Payment: Larger down payments reduce loan amount and may eliminate PMI
- Credit Score: Better credit scores typically qualify for lower interest rates
Loan Types:
Fixed Rate
Interest rate stays the same throughout the loan term
Adjustable Rate (ARM)
Interest rate can change based on market conditions
Before Taking a Loan:
- Check your credit score and report
- Calculate debt-to-income ratio
- Shop around with multiple lenders
- Understand all fees and closing costs
- Consider the total cost, not just monthly payment
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