Loan Calculator
Monthly Payment & Amortization Schedule
What Is a Loan Calculator?
A loan calculator computes your fixed monthly payment (annuity) based on the loan amount, annual interest rate, and repayment term. It also generates a full amortization schedule showing how each payment is split between principal and interest.
How Monthly Payments Are Calculated
The annuity formula is used for equal monthly payments:
Formula: Payment = P × [r(1+r)^n] ÷ [(1+r)^n − 1]
Where P = Principal, r = Monthly rate (annual rate ÷ 12), n = Number of months
Example: $10,000 loan at 12% annual interest for 24 months ≈ $470.73/month
Understanding Your Amortization Schedule
Each monthly payment is the same amount, but the split between principal and interest changes over time. Early payments are mostly interest; later payments are mostly principal.
Types of Loans
- Mortgage: Long-term (15–30 years), lower rates, property secured
- Personal loan: 1–7 years, mid-range rates, unsecured
- Auto loan: 2–7 years, vehicle secured
- Student loan: Variable terms and income-based repayment options
Frequently Asked Questions
Should I enter annual or monthly interest rate?
Enter the annual rate. The calculator automatically divides it by 12 to get the monthly rate.
How can I reduce total interest paid?
Choose a shorter term, make extra payments, or refinance at a lower rate. Even one extra payment per year significantly reduces total interest.
What is the difference between APR and interest rate?
The interest rate is the base cost of borrowing. APR includes fees and other costs, giving a truer picture of the loan's total cost.