Loan Calculator – Estimate Payments & Total Cost
Instantly calculate your monthly loan payment, total interest, and total cost for any loan amount, interest rate, and term. This tool works for personal loans, car loans, mortgages, and more. Compare scenarios, plan your budget, and make smarter borrowing decisions.
Why use a loan calculator? Understanding your monthly payment and total cost helps you avoid surprises, compare offers, and choose the best loan for your needs. Adjust the amount, rate, or term to see how each factor affects your payment and total interest.
How Loans Work
A loan is money you borrow from a lender and repay over time, usually with interest. Most personal, auto, and mortgage loans are amortizing: you make fixed monthly payments until the balance reaches zero. Each payment includes principal (the amount you borrowed) and interest (the cost of borrowing).
- Principal: The original amount you borrow.
- Interest: The cost charged by the lender, usually as a percentage of the principal.
- Term: The length of time you have to repay the loan.
Interest Rates & Monthly Payments
Your monthly payment depends on the loan amount, annual interest rate, and term. The calculator uses the standard amortization formula to compute a fixed payment. Early in the term, more of your payment goes to interest; later, more goes to principal as the balance declines.
Fixed vs Variable Rates
- Fixed rate: The interest rate stays the same for the entire term, so your payment doesn’t change.
- Variable/adjustable rate: The rate can change based on a benchmark. Payments may rise or fall over time.
APR vs Interest Rate
The interest rate is the cost of borrowing expressed annually, excluding fees. APR (Annual Percentage Rate) includes certain fees in addition to interest, which makes it useful for comparing offers. If a loan has origination fees or mandatory costs, APR is usually higher than the nominal rate.
Amortization & Total Cost
An amortization schedule breaks each payment into principal and interest and shows the remaining balance over time. The total cost of a loan equals all payments made minus the original amount borrowed. Lower rates, shorter terms, or extra principal payments reduce total interest paid.
Tips for Borrowers
- Improve your credit to qualify for a lower rate.
- Choose a shorter term to reduce total interest.
- Make extra principal payments when possible.
- Compare APRs across lenders, not just monthly payment.
- Read the fine print for prepayment penalties or hidden fees.
Example Calculation
Suppose you borrow $10,000 at 8% APR for 36 months. Your monthly payment is about $314. Over the full term you would pay roughly $1,304 in interest and $11,304 in total. Making occasional extra principal payments shortens the term and lowers interest.
Frequently Asked Questions (FAQ)
Can I repay a loan early?
Many loans allow early repayment without penalty, which saves interest. Check your agreement for prepayment penalties or other fees before paying extra.
Does refinancing help?
Refinancing can reduce your payment or total cost if you qualify for a lower rate or shorter term. Compare the new loan’s APR and any fees with your current loan.
What’s the difference between APR and interest rate?
APR includes certain fees and gives a more complete picture of the loan’s true cost. The interest rate is just the base cost of borrowing.
How can I pay less interest?
Choose a shorter term, make extra payments, or refinance at a lower rate. Improving your credit score can also help you qualify for better rates.
Is this calculator accurate for all loan types?
This calculator works for standard amortizing loans (personal, auto, mortgage). It does not model interest-only, balloon, or revolving credit lines.
Disclaimer
This tool is for education only and does not provide financial advice. Actual loan terms may vary. Always review your loan agreement and consult a qualified advisor if needed.
Interesting Facts & Guidance
- Even a small difference in interest rate can save you hundreds or thousands over the life of a loan.
- Making just one extra payment per year can significantly reduce your total interest.
- Some lenders offer rate discounts for autopay or loyalty programs—ask before signing.
- Always check for prepayment penalties before making extra payments.