CalcMaven

Loan Calculator

Calculate monthly payments and total interest for any loan amount, rate, and term.

Inputs

$
7.5%
030
5 years
130

Results

Monthly Payment
$500.95
Total Payment
$30,056.92
Total Interest
$5,056.92

Disclaimer: This calculator provides estimates for informational purposes only. Results are not financial advice. Consult a qualified financial advisor for decisions about your specific situation. Actual rates, terms, and conditions may vary by lender and individual circumstances.

How Does the Loan Calculator Work?

The loan calculator computes your fixed monthly payment for any type of installment loan using the standard amortization formula. It works for personal loans, home equity loans, business loans, and any fixed-rate debt. By entering the loan amount, interest rate, and term, you get the exact monthly payment amount and can see the full amortization schedule showing how each payment is divided between principal and interest. The calculator also shows the total cost of the loan, including all interest, so you can make informed decisions about whether to borrow and on what terms.

Formula: PMT = P x [r(1+r)^n] / [(1+r)^n - 1]

How to Use This Calculator

Enter the total loan amount you need to borrow, the annual interest rate (APR), and the loan term in years or months. The calculator instantly shows your monthly payment, total amount paid over the life of the loan, and total interest cost. Use the amortization schedule to understand exactly where your money goes each month. Compare different scenarios by adjusting the term length — shorter terms mean higher payments but dramatically less total interest.

Example Calculation

Sarah needs a $20,000 personal loan for home improvements. She is comparing offers: Bank A at 8.5% for 5 years versus Bank B at 9.9% for 3 years.

  1. 1Bank A: $20,000 at 8.5% for 60 months = $410/month
  2. 2Bank A total paid = $410 x 60 = $24,600, total interest = $4,600
  3. 3Bank B: $20,000 at 9.9% for 36 months = $645/month
  4. 4Bank B total paid = $645 x 36 = $23,220, total interest = $3,220
  5. 5Monthly difference: Bank B costs $235 more per month
  6. 6Interest savings: Bank B saves $1,380 in total interest
Result: Despite a higher rate, Bank B's shorter term saves $1,380 in total interest. If Sarah can afford $645/month, Bank B is the better deal. This shows why loan term matters more than you might expect.

Understanding Your Results

Your monthly payment is the fixed amount due each month until the loan is fully repaid. The total interest figure shows the true cost of borrowing beyond the principal. The amortization schedule reveals how payments shift from mostly interest early on to mostly principal toward the end. Pay attention to the total cost — on a 5-year personal loan at 10%, you pay about $2,748 in interest per $10,000 borrowed. Doubling the term roughly doubles the total interest even at the same rate.

Tips & Best Practices

  • ✓Making extra payments directly reduces your principal, saving interest over the life of the loan.
  • ✓Shorter loan terms mean higher monthly payments but significantly less total interest paid.
  • ✓Check if your loan has a prepayment penalty before making extra payments.
  • ✓Compare the total cost of the loan (principal + interest), not just the monthly payment.
  • ✓Your credit score significantly affects the rate you qualify for. Improving it by even 50 points can save thousands.
  • ✓Credit unions and online lenders often offer better rates than traditional banks for personal loans.

Frequently Asked Questions

What is an amortization schedule?▾
An amortization schedule is a complete table showing every loan payment broken down into principal and interest components. In the early months, the majority of each payment goes toward interest. As the principal balance decreases over time, less interest accrues, so more of each subsequent payment goes toward paying down the principal. This table helps you understand exactly where your money goes each month and how your loan balance decreases over time.
How do extra payments affect my loan?▾
Extra payments go directly toward reducing your loan principal. This reduces the total interest paid over the life of the loan and can significantly shorten your repayment period. Even small additional amounts make a meaningful difference. Adding $50/month to a $20,000 loan at 8% saves about $1,100 in interest and pays off the loan 8 months early. Adding $100/month saves about $2,000 and pays off 14 months early.
What is a good interest rate for a personal loan?▾
Personal loan rates typically range from 6% to 36%, depending on your credit score, income, debt-to-income ratio, and lender. Excellent credit (750+) can qualify for 6-10%. Good credit (700-749) typically sees 10-15%. Fair credit (630-699) may face 15-24%. Rates above 20% are expensive and you should consider alternatives or work on improving your credit first.
Should I choose a shorter or longer loan term?▾
Shorter terms save money on total interest but require higher monthly payments. Longer terms lower your monthly payment but cost significantly more in total interest. The best approach is to choose the shortest term where the monthly payment fits comfortably in your budget. If you choose a longer term for the lower payment, try to make extra payments whenever possible to reduce total interest.
What is the difference between fixed and variable rate loans?▾
A fixed-rate loan keeps the same interest rate for the entire term, giving you a predictable monthly payment. A variable-rate loan has an interest rate that changes periodically based on market conditions. Variable rates often start lower but can increase significantly over time. Fixed rates are safer for budgeting and recommended when rates are low. Variable rates may save money if you plan to pay off the loan quickly before rates could rise.
By CalcMaven Editorial TeamLast Updated: February 2026

Related Calculators

Mortgage Calculator

Calculate your monthly mortgage payment, total interest, and view a full amortization schedule.

Car Loan Calculator

Calculate your monthly car payment including down payment and trade-in value.

Student Loan Calculator

Calculate student loan payments with grace period and different repayment plans.

Debt Payoff Calculator

Find out how long it takes to pay off your debt and how much interest you will pay.

Free Loan Calculator — Payment & Interest Costs | CalcMaven