Calculation & Conversion / Calculators
Loan Calculator
A loan calculator turns three numbers — the amount borrowed, the annual interest rate and the term — into a monthly payment, the total interest you will pay, and a month-by-month amortization schedule showing how each payment splits between interest and principal.
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This space is reserved for a sponsor. Every tool on this site stays free and runs locally in your browser.
How to use
- 1
Enter the loan basics
Type the loan amount, the annual interest rate as a percentage, and the term in years or months. The calculator builds the amortization schedule from these three inputs.
- 2
Pick a repayment method
Choose equal-monthly for a constant payment, or equal-principal to see a payment that starts higher and falls as the balance drops. Both use the same amount, rate and term.
- 3
Read the summary
The summary shows the monthly payment, the total interest across the whole loan, and the total of all payments. For equal-principal it also shows the first and last monthly payment so you can see the range.
- 4
Open the schedule
The amortization schedule lists, for every month, the payment, the principal portion, the interest portion and the remaining balance. This is the evidence behind the headline numbers and confirms the balance reaches zero in the final month.
Key facts
- Formula (equal monthly)Monthly payment M = P × r(1+r)^n / ((1+r)^n − 1), where P is principal, r is the monthly rate (annual ÷ 12), and n is the number of months.Source:Standard amortization formula
- Equal principalWith equal-principal repayment the monthly principal is fixed at P/n, so interest — charged on the remaining balance — falls each month and the total interest is lower than the equal-monthly equivalent.Source:Loan amortisation
How this calculator works
The loan is amortized one month at a time. Each month, interest is charged on the outstanding balance at the annual nominal rate divided by twelve; the scheduled payment covers that interest first, and whatever is left reduces the principal. Payments are assumed to fall at the end of each month, and the loan ends in the month the balance reaches zero. All amounts are rounded to the cent, with the final month absorbing the rounding remainder so the balance lands exactly on zero.
Two conventions move the answer and are worth stating plainly. The rate is treated as a nominal annual rate compounded monthly — the US installment-loan convention — not an effective annual rate and not continuous compounding. The result is also nominal dollars: no inflation adjustment is applied, and no tax, origination fee, insurance or variable-rate change is modelled, so a figure here is not the after-tax or all-in cost of the loan.
Sources and standards
Disclaimer
This is an educational calculator, not financial advice. The result is an arithmetic projection of the figures you enter: it does not know your full circumstances, the terms of a specific offer, or the tax and regulatory rules that apply where you live. Confirm any figure against the terms of the product itself, or with a licensed professional, before acting on it.
Last reviewed:
Frequently asked questions
What is the difference between equal-monthly and equal-principal repayment?
Equal-monthly keeps the total payment the same every month: early on most of it is interest, and the principal share grows with each payment. Equal-principal pays the same chunk of principal every month, so the interest — charged on the shrinking balance — falls each month and the total payment starts high and drops over time. Equal-monthly is easier to budget; equal-principal pays less total interest but front-loads the cost.
Is the rate an annual rate or a monthly rate?
You enter the annual nominal rate (for example 5.5 for 5.5%), and the calculator divides it by twelve to get the monthly rate. That is the standard way US installment loans are amortized — a nominal annual rate compounded monthly, not an effective annual rate and not continuously compounded.
Does paying off a loan early save money?
Usually, yes, because interest is charged on the remaining balance each month — any extra principal you pay shrinks that balance immediately, so every later month accrues less interest. The saving is largest when the extra payment is made early in the loan, while the balance is still high. This calculator models level payments; for an extra-payment scenario see the mortgage payoff tool.
What is not included in the total?
The figures are the loan itself: principal plus interest at the rate and term you enter. They exclude taxes, origination or service fees, mortgage insurance, and any interest-rate changes on a variable-rate loan. They are also nominal dollars, with no inflation adjustment, so they are not the after-tax cost of borrowing.
How loan amortization really works
Interest is charged on the balance, not on the loan
Every payment does two jobs at once: it pays the interest that accrued on the outstanding balance during the month, and whatever is left over reduces that balance. Because the balance starts at its largest, the interest portion is largest in the first months and the principal portion is smallest. The split then reverses steadily.
This is why the headline rate is not the cost of the loan. A 6% loan held for one year costs roughly 6% of the average balance over that year, not 6% of the amount you borrowed.
Equal monthly versus equal principal
Equal monthly solves one equation so the total payment never moves: M = P x r(1+r)^n / ((1+r)^n - 1), where P is the principal, r the monthly interest rate and n the number of months. It is the standard structure for mortgages, car loans and personal loans because the payment is predictable.
Equal principal instead fixes the principal portion at P / n and lets the interest float. The payment therefore starts at its highest and falls every month. It pays less interest overall, but it front-loads the cash requirement, which is what most borrowers cannot absorb.
What the numbers do not include
The figures are principal and interest only. Origination fees, service charges, mortgage insurance, property taxes and escrow are not modelled, and neither is a variable rate that resets mid-term. Those items are exactly where two offers with the same headline rate can end up costing different amounts.
The rate is treated as a nominal annual rate compounded monthly, which is the US instalment-loan convention. If a lender quotes an effective annual rate, or folds fees into an APR, the same loan can look cheaper or dearer on paper than it behaves in this schedule.
| Aspect | Equal monthly | Equal principal |
|---|---|---|
| Monthly payment | Same every month (the final month differs by cents) | Starts highest, falls every month |
| Principal per month | Small at first, grows over time | Fixed at principal divided by months |
| Interest per month | Falls slowly, because the balance falls slowly | Falls faster, because the balance falls faster |
| Total interest | Higher | Lower |
| First-month cash need | Lower | Higher |
| Typical use | Mortgages, car loans, personal loans | Some mortgages, some business loans |
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