Loan Payment Calculator

Whether you are financing a new car, consolidating high-interest debt, or taking out a personal loan, the monthly payment and total interest cost are the two numbers that determine whether a loan fits your budget and whether it is worth taking at all. This loan payment calculator covers all fixed-rate amortizing loans: auto loans, personal loans, student loans, and any other installment loan with a set interest rate and fixed repayment schedule. Loan term has an outsized effect on total cost that is easy to underestimate. A $25,000 auto loan at 6.5% costs $487 per month over 5 years and $4,248 in interest. Stretch that same loan to 7 years and the payment drops to $372 per month — but total interest climbs to over $6,200, costing nearly $2,000 more to reduce the monthly payment by $115. For borrowers with tight monthly budgets, a longer term may be necessary, but the interest cost comparison makes the tradeoff explicit. Credit unions typically offer lower rates than traditional banks or dealership financing. Even a 2% APR difference on a $20,000 loan over 60 months saves over $1,000 in total interest. This calculator makes it easy to quantify those savings before accepting any offer.

Monthly loan payments are calculated using the standard fixed-rate amortization formula: M = P × [r(1+r)^n] ÷ [(1+r)^n − 1]. Here P is the loan principal, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments. For a $25,000 loan at 6.5% over 60 months, r = 0.065 ÷ 12 = 0.005417 and n = 60. This formula produces a fixed amortizing payment — every payment is the same dollar amount, but the split between interest and principal shifts each month. In the first payment, the majority covers the interest that has accrued on the full balance. As the principal is gradually reduced by each payment, each subsequent month carries less interest and more principal reduction. By the final payment, nearly the entire amount goes directly to the remaining principal. Total interest paid is calculated by multiplying the monthly payment by the number of payments, then subtracting the original principal: Total Interest = (M × n) − P. Interest as a percentage of the loan is also displayed to allow direct comparison between different rate and term combinations — a useful metric when evaluating whether the convenience of a longer term justifies its additional cost. Even a modest increase in monthly payment significantly reduces total interest when applied consistently throughout the loan.