Loan Payment Calculator
Calculate your monthly payment
About the Calculator
Loans are easy to accept and hard to undo, especially when the monthly payment looks fine but the total cost is huge. This calculator shows the payment, total interest, and full payoff cost so you can see the real price of borrowing. Use it to compare rates and terms side by side, or to decide whether a shorter loan is worth the higher monthly payment. It is a quick way to test what happens if you change the loan amount, rate, or term before you commit. It also helps you set expectations before talking with a lender. When the numbers are clear, the decision gets easier.
Monthly Payment
$1,580.17
Total Payment
$568,861.22
Total Interest
$318,861.22
The Formula
How to Calculate Manually
- 1
Identify the loan principal (P) - the amount you're borrowing.
- 2
Convert the annual interest rate to a monthly rate by dividing by 12.
- 3
Convert the rate from percentage to decimal (divide by 100).
- 4
Determine the total number of payments (n) by multiplying years by 12.
- 5
Apply the formula to calculate the monthly payment (M).
Examples
What's the monthly payment on a $250,000 mortgage at 6.5% for 30 years?
M = $250,000 × [0.00542(1.00542)^360] / [(1.00542)^360 - 1] = $1,580.17/month
What's the monthly payment on a $25,000 car loan at 5% for 5 years?
M = $25,000 × [0.00417(1.00417)^60] / [(1.00417)^60 - 1] = $471.78/month
💡 Tips
- •A larger down payment reduces your monthly payment and total interest paid.
- •Shorter loan terms have higher monthly payments but lower total interest.
- •Consider making extra payments to pay off your loan faster.
- •Shop around for the best interest rates before committing to a loan.
🎉 Fun Facts
- •The Short vs Long Trade-off: Cutting a loan from 60 months to 36 months can save 40-50% of total interest paid, but increases monthly payments by 30-40%. A $25,000 loan at 7% costs $495/month for 60 months vs. $772/month for 36 months.
- •The Extra Payment Magic: Making just one extra payment per year on a 5-year auto loan can cut 6-8 months off the term and save hundreds in interest. It's the equivalent of a 13th monthly payment applied to principal.
- •The Rate-Breaking Points: Each 1% increase in interest rate on a $20,000 loan adds approximately $550-650 in total interest over a typical 60-month term, making credit score improvement worth thousands.
- •The $500/Month Trap: At current average auto loan rates (7-8%), $500/month can finance approximately $25,000-27,000 over 60 months, but most new cars now average $47,000+, pushing buyers into 72-84 month loans.
- •Front-Loaded Interest: On a typical amortizing loan, approximately 70-80% of your first year's payments go toward interest, not principal. A $20,000 loan at 7% sees just $150-200/month actually reducing the balance early on.
- •The Refinancing Sweet Spot: Refinancing a loan makes sense if you can reduce the rate by 0.75-1% or more and haven't paid off more than 50% of the loan, but beware of extending the term and paying more total interest.