Use this free loan calculator to work out your monthly loan payment. Enter the loan amount, the yearly interest rate and the loan term to see your payment, the total interest, the total you will repay and your payoff date, then add an extra monthly payment to see how much interest it saves. A payment schedule shows how your balance falls, and you can copy a link or print your results. It works as a loan payment calculator and a loan interest calculator for car, personal, student and most other loans. It is free and instant, and your numbers stay in your browser.
How a loan payment works
Most loans, such as car loans, personal loans and student loans, are repaid in equal monthly payments over a set number of years. In some countries this fixed payment is called an EMI, which stands for equated monthly instalment. Each payment has two parts: some of it repays the money you borrowed (the principal) and the rest is the interest the lender charges.
How to calculate your monthly loan payment
The monthly payment on a fixed-rate loan comes from the standard loan payment formula:
M = monthly payment, P = loan amount, r = monthly interest rate (annual rate ÷ 12 ÷ 100), n = number of monthly payments (years × 12)
Example: you borrow $25,000 at 7.5% a year for 5 years. Here r = 7.5 ÷ 12 ÷ 100 = 0.00625 and n = 60, so the payment works out to $500.95 a month. Over the 60 payments you repay $30,057 in total, which is $5,057 of interest.
If the interest rate is 0%, there is no formula to worry about: the payment is just the loan amount divided by the number of months ($416.67 for the loan above).
What changes your payment
- Loan amount. Borrowing more raises the payment in direct proportion.
- Interest rate. A higher rate raises the payment and the total interest.
- Loan term. A longer term lowers each payment but means you pay more interest overall. This is the trade-off to watch.
The same $25,000 loan at 7.5% over different terms:
| Loan term | Monthly payment | Total interest | Total paid |
|---|---|---|---|
| 3 years | $777.66 | $2,996 | $27,996 |
| 4 years | $604.47 | $4,015 | $29,015 |
| 5 years | $500.95 | $5,057 | $30,057 |
| 6 years | $432.25 | $6,122 | $31,122 |
| 7 years | $383.46 | $7,210 | $32,210 |
Going from 3 years to 7 years lowers the payment by about $394 a month, but it costs about $4,214 more in interest.
And the same $25,000 loan over 5 years at different interest rates:
| Interest rate | Monthly payment | Total interest |
|---|---|---|
| 5% | $471.78 | $3,307 |
| 6% | $483.32 | $3,999 |
| 7% | $495.03 | $4,702 |
| 8% | $506.91 | $5,415 |
| 9% | $518.96 | $6,138 |
| 10% | $531.18 | $6,871 |
On this loan, each extra percentage point adds about $12 a month and about $700 in interest.
Why the early payments are mostly interest
Interest is charged on the amount you still owe, and at the start that is the whole loan. In the $25,000 example above, the first payment of $500.95 is made up of $156.25 interest and only $344.70 principal. As the balance falls, the interest part shrinks and the principal part grows, and the last payment is $497.84 principal and just $3.11 interest. The payment schedule under the calculator (also called an amortization schedule) shows this month by month.
Paying off a loan early with extra payments
Any extra money you pay goes straight towards the balance you owe, so interest is charged on less from then on. Your normal monthly payment stays the same, but the loan ends sooner. On the same $25,000 loan at 7.5% over 5 years:
- $50 extra a month pays the loan off in 4 years 6 months, 6 months sooner, and saves $564 in interest.
- $100 extra a month pays it off in 4 years 1 month, 11 months sooner, and saves $1,014.
- $200 extra a month pays it off in 3 years 5 months, 1 year 7 months sooner, and saves $1,683.
A single lump sum, such as a bonus or tax refund, works too: a $2,000 one-time payment made with the 13th payment pays this loan off 5 months sooner and saves $645 in interest. Enter an amount in the "Extra payment per month" box, or open "One-time extra payment and start date", to see the same effect on your own loan. Before you pay extra, check that your lender does not charge a penalty for early repayment and that the extra money goes to the principal straight away.
Interest rate or APR?
The interest rate is the cost of borrowing the money. The APR (annual percentage rate) also includes most lender fees, so it is the better number for comparing offers. This calculator uses the interest rate to work out your payment. If your loan has an origination fee or other up-front fees, add them under "Fees" and the calculator shows the total cost and the APR with those fees included. For example, a $25,000 loan at 7.5% over 5 years with $350 of fees has an APR of 8.10%.
Flat rate or reducing balance?
This calculator uses the reducing balance method, where interest is worked out each month on the remaining loan. Some lenders quote a flat rate instead, where interest is charged on the full original amount for the entire loan. A flat rate looks lower, but the real cost is much higher than the same number quoted as a reducing balance rate. If a lender quotes a flat rate, ask for the equivalent APR before comparing offers.
Which loans can I use it for?
It works for any loan repaid in equal monthly payments at a fixed rate: personal loans, car loans, student loans, business loans, home improvement loans and most other instalment loans. It is not the right tool for credit cards, loans with a variable rate that changes your payment, interest-only loans or loans with a final balloon payment. For a home loan use the Mortgage Calculator, which also adds property tax, insurance and PMI.
Loans in the US, UK and Australia
The maths of a repayment loan is the same everywhere, so this calculator works in any currency. Choose your currency in the Currency symbol box at the top of the form. Lenders in the UK quote a representative APR, and lenders in Australia show a comparison rate, which are both ways of including most fees in one number.
Ways to pay less interest
- Choose the shortest term whose payment you can comfortably afford.
- Make a larger down payment or deposit so you borrow less.
- Compare the APR from several lenders before you decide, not just the headline rate.
- If your lender allows it without a penalty, make extra payments to reduce the balance early.
- Check fees such as arrangement or processing charges and insurance, and add them under "Fees" to see the real cost.
