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Loan Payment Calculator Guide
Before you take a loan, it helps to know the monthly payment and what it costs in total. This calculator gives your monthly payment, the total you'll repay, and the total interest for any fixed-rate loan — car, personal, or student.
M = P × r ÷ (1 − (1 + r)−n), where P is the loan amount, r is the monthly rate (APR ÷ 12), and n is the number of months.
How Do I Calculate a Loan Payment?
Convert the annual rate to a monthly rate and the term to months, then apply the amortization formula. The payment stays the same each month, but early payments are mostly interest and later ones mostly principal.
What Changes Your Payment
| Factor | Effect |
|---|---|
| Higher loan amount | Higher payment and more total interest |
| Higher interest rate | Higher payment and much more interest |
| Longer term | Lower payment but more total interest |
| Shorter term | Higher payment but far less interest |
Worked Example
A $25,000 loan at 7.5% over 5 years (60 months): monthly rate = 0.625%, payment ≈ $501, total repaid ≈ $30,058, total interest ≈ $5,058.
Tips
- Compare total interest, not just the payment — a longer term feels cheaper monthly but costs more overall.
- Check the APR, not the rate — APR includes most fees and is the fair comparison.
- Even small extra payments cut the interest and shorten the loan.
Paying off a mortgage instead? Use our Mortgage Payoff Calculator, or tackle multiple balances with the Debt Snowball Calculator.
These results are estimates for planning only and are not financial advice. Actual rates, terms, fees, and eligibility vary by lender.
Frequently Asked Questions
How do I calculate a loan payment?
Use M = P × r ÷ (1 − (1 + r)^−n), where r is the annual rate divided by 12 and n is the number of months.
What is the monthly payment on a $25,000 loan?
About $501 a month on a 5-year loan at 7.5% APR, for roughly $5,058 in total interest.
Does a longer loan term lower my payment?
Yes, but it increases the total interest you pay over the life of the loan.
What's the difference between interest rate and APR?
The interest rate is the cost of borrowing the principal, while APR also includes most fees, making it the better number for comparing loans.
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