Calculate your periodic loan payment, total interest, and total repayment for mortgages, auto loans, or personal loans.
The calculator determines your fixed periodic payment (PMT) using the present value of an ordinary annuity formula:
PMT = P * [i * (1 + i)N] / [(1 + i)N - 1]
Where: P is the loan principal, i is the periodic interest rate (annual rate / 12), and N is the total number of payments (term in years * 12).
For a $300,000 loan over 30 years at a 6% annual interest rate, the calculator first finds the monthly interest rate (0.5%) and total payments (360). It then applies the formula to find the monthly payment, total repayment, and total interest paid over the loan's life.
The Loan Calculator is an essential financial tool designed for anyone considering taking out a loan, whether it's for a new home, a car, or personal expenses. It demystifies the complex process of loan repayment by providing a clear and detailed breakdown of your financial commitment. By simply entering the loan amount, annual interest rate, and loan term, you can instantly determine your fixed monthly payment. More importantly, this tool goes beyond the monthly figure to reveal the total interest you will pay over the life of the loan, giving you a comprehensive understanding of the borrowing's true cost. This empowers you to compare loan offers, plan your budget, and make informed financial decisions with confidence.
At its core, the Loan Calculator operates on the principle of amortization. An amortizing loan is one where each fixed payment is composed of both a principal and an interest component. In the early stages of the loan, a larger portion of your payment goes towards interest. As you continue to make payments and the principal balance decreases, the interest portion of each payment shrinks, and more of your money goes towards paying down the actual debt. Our calculator uses the standard amortization formula to ensure the results are accurate and reflective of how most consumer loans are structured. This provides a reliable forecast for budgeting and financial planning.
The versatility of the Loan Calculator makes it suitable for a wide range of scenarios. For prospective homeowners, it functions as a powerful mortgage calculator, helping them estimate monthly housing costs. For car buyers, it clarifies how different loan terms and rates will impact their auto loan payments. It is also invaluable for analyzing personal loans or student loan refinancing options. For those seeking to deepen their understanding of loan structures, authoritative resources like the Wikipedia page on Amortization provide detailed explanations. Additionally, government resources like the Consumer Financial Protection Bureau (CFPB) offer unbiased information on mortgage and consumer lending practices.
Using the Loan Calculator for scenario analysis is one of its most powerful applications. You can quickly see how a slightly lower interest rate or a shorter loan term can save you tens of thousands of dollars in interest. This knowledge is crucial during negotiations with lenders and in deciding which loan product best fits your financial goals. The tool enhances user experience with features like session history to compare different calculations and a one-click copy button to easily transfer results. The Loan Calculator is more than just a numbers tool; it's a strategic aid for navigating one of life's most significant financial commitments.
Explore all remaining calculators in this Financial category.
Explore specialized calculators for your industry and use case.
Amortization is the process of spreading out a loan into a series of fixed payments over time. Each payment consists of both principal and interest. Over the loan term, the principal portion of the payment increases while the interest portion decreases.
You can lower your monthly payment by finding a loan with a lower interest rate, extending the loan term (which increases total interest paid), or by borrowing a smaller amount. You can also make a larger down payment to reduce the principal.
The interest rate is the cost of borrowing the principal loan amount. The Annual Percentage Rate (APR) is a broader measure that includes the interest rate plus other loan fees (like origination fees or closing costs), giving you a more complete picture of the loan's annual cost.
No, this calculator is designed for standard amortizing loans where each payment includes both principal and interest. It does not calculate payments for interest-only loans or loans with balloon payments.