Loan Payment Calculator

The fixed-payment amortization formula uses the amount borrowed, monthly interest rate and total number of monthly payments. At 0% interest the balance is divided equally over the term.

$10,000 borrowed at 6% for 5 years requires approximately $193.33 per month, with approximately $1,599.68 total interest before fees. At 0%, the same loan is $166.67 per month.

Compare both monthly payment and total interest. If a lender adds an origination fee to the balance, include it in the amount borrowed to model its financing cost.

The estimate assumes fixed interest, on-time monthly payments and no fees or prepayment penalties. APR can include fees and may not equal the contract interest rate.

The principal box is the amount financed. If a purchase costs $12,000 and you pay $2,000 upfront, the loan amount is $10,000 before any financed charges. The form does not subtract a down payment for you. Enter the annual interest rate and the repayment period in months. A five-year loan is 60 months; entering 5 would make the repayment interval much shorter and the calculated monthly payment much larger.

The calculation assumes a fixed rate and equal monthly principal-and-interest payments. It is suitable for examining that particular structure, not every product called a loan. A revolving credit line, interest-only arrangement, balloon payment or variable-rate agreement requires different assumptions. If fees are financed, reconcile them with the principal before comparing the result with a lender's quote. Charges paid separately are not automatically included in the tool's total interest.

A $12,000 principal at zero interest over 24 months produces a $500 monthly payment. Over 36 months it produces approximately $333.33. Total principal repayment remains $12,000 in either illustration because no interest is charged. This is a useful arithmetic check, not a claim that zero-rate financing is available to you. At a positive rate, changing the term affects both the payment and the total interest, so compare those outputs together.

Internally, the formula keeps more precision than the displayed cents. Multiplying a rounded payment by the number of months can therefore differ slightly from the displayed total calculated with the unrounded value. A real lender may adjust the last payment to reconcile its schedule. Do not interpret a small rounding difference as an additional fee without checking the contract and schedule. For a substantial discrepancy, compare principal, rate and period first.

With a regular amortizing loan, monthly interest is based on the remaining principal. Early payments therefore contain more interest than later payments, even when the scheduled payment stays constant. The remainder of each payment reduces the balance. The annual schedule helps show that progression by grouping the modeled payments into years. It is not a prediction of changes in your rate, nor does a larger early interest portion mean the lender has changed the fixed rate.

Compare the balance and interest columns with the payment rather than reading one row alone. A partial final year can have fewer payment periods than a full year. The schedule shown here follows the entered term and the monthly-rate formula. It does not accept an extra-payment calendar or model a payment holiday. If you want to evaluate a contract with those features, use its actual terms and a method that represents the timing of the changes.

A quoted APR and a contract interest rate can serve different purposes when borrowing charges are involved. This tool uses the entered percentage in the monthly interest formula; it does not reconstruct an APR from fees. Comparing two offers may require looking at the cash received, financed principal, payments and charges separately. A lower percentage in the rate box is not proof of a cheaper overall deal if the starting balance or upfront costs differ.

The result is not an approval decision, affordability assessment or recommendation to borrow. Keep room in your budget for expenses that the loan payment does not describe. If the agreement uses irregular dates, daily interest, an adjustable rate or a final balloon amount, expect differences from this simplified schedule. Use the calculation to make the stated fixed-rate assumptions understandable, then check the lender's written repayment terms before relying on it for a financial commitment.