Loan Payment Calculator
Print| Total Cumulative Interest Paid | $0.00 |
| Total Out-of-Pocket Payment | $0.00 |
The Loan Payment Calculator helps borrowers determine exact monthly installment payments, interest expenses, and total loan costs for personal financing, auto loans, mortgages, and business debts. Compute payment amounts across varying loan amounts, interest rates (APR), and loan terms.
The Loan Payment Amortization Formula
Monthly principal and interest payments for amortized installment loans are calculated using the standard mathematical payment formula:
Monthly Payment (PMT) = Loan Principal × [ r(1 + r)^n ] / [ (1 + r)^n - 1 ]
Total Interest Cost = ( Monthly Payment × n ) - Loan Principal
Where:
- Loan Principal: Total dollar amount borrowed from the lender.
- r (Monthly Rate): Annual Percentage Rate (APR) divided by 12 months.
- n (Total Term in Months): Number of scheduled monthly installment payments (e.g., 36, 60, 120, or 360 months).
Monthly Loan Payment Benchmarks
Compare estimated monthly payments and total interest costs for a $20,000 loan across varying APRs and terms:
| Annual APR | 3-Year Term (36 mos) | 5-Year Term (60 mos) | 7-Year Term (84 mos) |
|---|---|---|---|
| 6.00% APR | $608.44 / mo ($1,903.84 int) | $386.66 / mo ($3,199.60 int) | $292.29 / mo ($4,552.36 int) |
| 9.00% APR | $635.99 / mo ($2,895.64 int) | $415.17 / mo ($4,910.20 int) | $321.68 / mo ($7,021.12 int) |
| 12.00% APR | $664.29 / mo ($3,914.44 int) | $444.89 / mo ($6,693.40 int) | $352.27 / mo ($9,590.68 int) |
| 15.00% APR | $693.30 / mo ($4,958.80 int) | $475.80 / mo ($8,548.00 int) | $384.03 / mo ($12,258.52 int) |
Step-by-Step Loan Payment Calculation Example
Here is an example calculating monthly payments for a $15,000 auto loan at 7.50% APR over 5 years (60 months):
- Identify Loan Inputs: Principal = $15,000, APR = 7.50%, Term = 60 months.
- Calculate Monthly Rate:
7.50% / 12 = 0.625% (0.00625 per month). - Compute Monthly Payment: Applying the payment formula yields $300.57 per month.
- Calculate Total Loan Repayment:
$300.57 × 60 months = $18,034.20 total paid. - Determine Total Interest Expense:
$18,034.20 - $15,000 = $3,034.20 total interest.
Frequently Asked Questions
How does loan term length affect my monthly payment?
Extending your loan term lowers your required monthly payment amount but increases your total lifetime interest expense. Shorter terms raise your monthly payment but cut total borrowing costs.
Can extra monthly principal payments reduce my overall loan cost?
Yes. Making extra principal payments accelerates debt payoff, lowers your outstanding balance faster, and eliminates future interest accrual.
What is the difference between APR and interest rate on a loan?
The interest rate is the base percentage cost of borrowing principal. APR (Annual Percentage Rate) includes the interest rate plus required upfront lender fees (origination or documentation fees).
Is there a prepayment penalty for paying off a loan early?
Most modern personal, auto, and consumer loans do not charge prepayment penalties, but you should verify your lender agreement prior to submitting early payoff funds.