Loan Payment Calculator

Enter the amount borrowed, the annual interest rate and the term. You get the fixed monthly payment and a schedule showing how each payment splits between interest and principal.

Loan payment

Monthly payment495.03
Number of payments
60
Total of payments
29,701.82
Total interest
4,701.82
Final payment (adjusted for rounding)
495.05
Amortization schedule by year
YearPaidPrincipalInterestBalance
15,940.364,327.451,612.9120,672.55
25,940.364,640.261,300.1016,032.29
35,940.364,975.74964.6211,056.55
45,940.365,335.41604.955,721.14
55,940.385,721.14219.240.00

Working

  1. Monthly rate i = 7% ÷ 12 = 0.00583333
  2. Payment = P × i ÷ (1 − (1 + i)^−n) = 25,000.00 × 0.00583333 ÷ (1 − (1 + 0.00583333)^−60)
  3. = 495.029964, rounded to 495.03 per month

Assumes a fixed rate, interest charged monthly at the annual rate ÷ 12, and no fees, insurance or taxes. Lenders’ figures can differ slightly because of rounding, day-count and fee rules.

The payment formula

M = P × i ÷ (1 − (1 + i)^−n)

M
monthly payment
P
amount borrowed
i
monthly interest rate = annual rate ÷ 12
n
number of monthly payments

If the rate is zero the payment is simply P ÷ n.

Worked example

25,000 at 7% for 5 years

  1. i = 0.07 ÷ 12 = 0.0058333
  2. n = 60
  3. M = 25,000 × 0.0058333 ÷ (1 − 1.0058333^−60) = 495.03

Payment 495.03 a month; total interest 4,701.82.

How amortization works

Each month, interest is charged on the remaining balance, and the rest of the payment reduces the balance. Early payments are therefore mostly interest and later ones mostly principal. The schedule above shows this split; the final payment may differ by a few cents because each month’s interest is rounded to the cent.

How the term changes the cost

10,000 borrowed at 8% a year
TermMonthly paymentTotal interest
12 months869.88438.62
24 months452.27854.55
36 months313.361,281.13
48 months244.131,718.19
60 months202.762,165.92
72 months175.332,624.00

A longer term lowers the monthly payment but increases the total interest paid.

What this calculator leaves out

  • Fees, points and charges — these are included in a lender’s legally disclosed APR, which is why it can be higher than the interest rate.
  • Property tax, insurance and mortgage insurance that are often collected with a mortgage payment.
  • Variable or adjustable rates, payment holidays and extra repayments.
  • Day-count and payment-date details, which can move a lender’s figures by a few cents.