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Loan Payment Calculator

Every fixed-rate installment loan in the US — auto loans, personal loans, and conventional mortgages — prices the monthly payment with the same amortization formula: M = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1), where P is the amount borrowed, r the monthly rate (APR ÷ 12 ÷ 100), and n the term in months. This calculator runs that exact formula, shows total interest and total paid, and expands into a full amortization schedule so you can see how slowly principal falls in the early years. Assumptions: simple monthly amortization on the declining balance, payments at month-end, and a constant rate for the whole term. For mortgages the result is principal and interest only — it does not include escrow items like property taxes, homeowners insurance, PMI, or HOA dues, which lenders often bundle into the payment you actually send.

Monthly payment

$596.72

Total interest

$7,963

Total paid

$42,963

Principal 81.5% · Interest 18.5% of total paid

Amortization schedule

First 12 payments

MonthInterestPrincipalBalance
1$204.17$392.55$34,607.45
2$201.88$394.84$34,212.61
3$199.57$397.14$33,815.47
4$197.26$399.46$33,416.01
5$194.93$401.79$33,014.22
6$192.58$404.13$32,610.09
7$190.23$406.49$32,203.60
8$187.85$408.86$31,794.74
9$185.47$411.25$31,383.50
10$183.07$413.64$30,969.85
11$180.66$416.06$30,553.79
12$178.23$418.48$30,135.31

Year-by-year summary

YearOpening balanceInterest paidPrincipal paidClosing balance
1$35,000$2,296$4,865$30,135
2$30,135$1,944$5,216$24,919
3$24,919$1,567$5,593$19,325
4$19,325$1,163$5,998$13,328
5$13,328$729$6,431$6,896
6$6,896$264$6,896$0

How to use the loan payment calculator

  1. Pick a preset — Auto ($35,000, 7% APR, 6 years), Personal ($10,000, 11.5%, 3 years), or Mortgage ($350,000, 6.5%, 30 years) — then adjust with the sliders or type exact figures.
  2. Enter the term in years, or switch the unit to months for short loans.
  3. Read the monthly payment, total interest, and total paid; the bar shows what share of your money goes to interest.
  4. Expand the amortization schedule for the first 12 payments month by month, plus a year-by-year summary of interest, principal, and remaining balance.

Where the payment formula comes from

The fixed payment M is the amount that makes the present value of all n payments equal the loan principal. Discounting each future payment at the monthly rate r and summing the geometric series gives P = M × (1 − (1 + r)⁻ⁿ) ÷ r; solving for M produces the standard form. Two consequences fall out of the algebra: when r = 0 the payment is simply P ÷ n (the calculator handles this case directly), and for any positive rate the early payments are interest-heavy because interest accrues on the still-large balance. The amortization schedule makes this visible: each row charges interest on the opening balance, applies the rest of the payment to principal, and carries the smaller balance forward.

Sensitivity: what +1% APR or a longer term does

Base case: $350,000 mortgage, 6.5% APR, 30 years → payment $2,212/month, total interest ≈ $446,400.

ChangePaymentTotal interestvs base
Base (6.5%, 30y)$2,212$446,400—
Rate +1% (7.5%, 30y)$2,447$531,000+$84,600 interest
Term −15y (6.5%, 15y)$3,049$198,800−$247,600 interest

The asymmetry is the lesson: term moves total cost more than rate. Shoppers obsess over an eighth of a point while signing up for 84-month auto loans; the term decision usually dwarfs the rate decision. On the $35,000 auto preset at 7%, six years costs about $597/month and $7,960 in interest — stretching to seven or eight years trims the payment but adds interest and extends the period you owe more than the car is worth.

Planning around your payment

The payment is only the start of loan management. Once you know your number, the next questions are whether a lump-sum or recurring extra payment should come first — the loan prepayment calculator shows the exact interest saved — and whether surplus cash earns more invested than prepaid, which the investment goal calculator helps you test against your loan's APR. A common underwriting benchmark: lenders prefer total monthly debt payments (including the new loan) under about 36–43% of gross income, the debt-to-income ratio they check before approving you in the first place. Keeping your own budget below that ceiling leaves room for the costs the loan math ignores — maintenance, insurance, and rate changes on any variable-rate debt you carry.

Frequently asked questions

How is a monthly loan payment calculated, exactly?

M = P·r·(1+r)^n / ((1+r)^n − 1). For a $350,000 mortgage at 6.5% APR over 30 years: r = 6.5/12/100 = 0.0054167 and n = 360. (1.0054167)^360 ≈ 6.992, so M = 350,000 × 0.0054167 × 6.992 ÷ 5.992 ≈ $2,212 per month. Over 360 payments you hand over about $796,400 in total, of which roughly $446,400 is interest — more than the original loan.

Why does most of my early payment go to interest?

Each month's interest equals the outstanding balance times the monthly rate. In month one of the $350,000, 6.5% example, interest alone is 350,000 × 0.0054167 ≈ $1,896 of the $2,212 payment — about 86%. Only $316 reduces the balance. As the balance shrinks the split shifts; on this loan, principal does not exceed interest within a single payment until roughly month 232, about 19 years in. Lenders are not front-loading interest by choice — it is pure arithmetic on the remaining balance.

Does a longer term make the loan cheaper?

It lowers the payment but raises the total cost, often dramatically. Compare a $350,000 mortgage at 6.5%: 30 years costs about $2,212/month and $446,400 in interest, while 15 years at the same rate costs about $3,049/month but only $198,800 in interest — $837 more per month buys roughly $247,600 in savings. (In practice 15-year mortgages usually carry lower rates too, widening the gap.) The same logic applies to stretching an auto loan from 60 to 84 months.

What is APR, and is it the same as the interest rate?

APR (annual percentage rate) is the yearly cost of credit that lenders must disclose under the Truth in Lending Act. On auto and personal loans it folds in mandatory finance charges, so it can run slightly higher than the note rate; on a no-fee loan they match. This calculator treats your input as the rate used for monthly amortization (APR ÷ 12), which is how US installment loans accrue. If your loan has origination fees deducted up front, your effective cost is a bit higher than the payment math alone suggests.

Why is my real mortgage payment higher than this number?

Because most US mortgage servicers collect escrow on top of principal and interest. Property taxes, homeowners insurance, and (if you put less than 20% down) private mortgage insurance are added to the monthly bill — together often $400–$900+ depending on your state and home value. This calculator intentionally shows principal and interest only, the part the amortization formula governs. Budget separately for escrow, and remember it changes yearly while P&I on a fixed-rate loan never does.

How do extra payments change the math?

Every extra dollar goes straight to principal, which cuts all future interest charged on that dollar. One extra payment a year on a 30-year mortgage typically shortens the term by 4–5 years. Since most US auto loans, personal loans, and conforming mortgages have no prepayment penalty, this is the most reliable way to cut interest cost without refinancing — run the exact numbers in the loan prepayment calculator.

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