Loan Calculator

Calculate your monthly payment, total interest, and see a year-by-year amortization breakdown for any fixed-rate loan.

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How it works

The monthly payment for a fixed-rate loan is calculated using the standard amortization formula:

M = P × r(1+r)n / [(1+r)n − 1]

M = Monthly payment

P = Principal (loan amount)

r = Monthly interest rate (annual rate ÷ 12)

n = Total number of payments (loan term in months)

Each monthly payment is split between interest and principal. Early in the loan, most of the payment goes toward interest. Over time, more goes toward paying down the principal — this shift is called amortization.

Common loan types

Personal loans: Typically 3-7 years, 6-36% APR. Unsecured, so rates are higher. Used for debt consolidation, home improvement, or major purchases.

Auto loans: Typically 3-7 years, 4-13% APR. Secured by the vehicle. New cars generally qualify for lower rates than used cars.

Mortgages: Typically 15 or 30 years, 3-8% APR. Secured by the property. Longest terms and lowest rates due to the collateral.

Student loans: Typically 10-25 years, 4-8% APR. Federal loans have fixed rates set by the government. Private loans may have variable rates.

Tips for getting a better rate

Credit score: Higher scores (740+) unlock the best rates

Down payment: Larger down payments reduce your loan-to-value ratio and can lower rates

Shorter terms: Shorter loan terms generally come with lower interest rates

Shop around: Get quotes from at least 3 lenders to compare offers

How Loan Payments Work

A fixed-rate loan payment stays the same every month, but the split between principal and interest changes over time. In the early years, most of your payment goes toward interest. As you pay down the principal, the interest portion shrinks and more goes toward the balance. This is called amortization.

The monthly payment formula is M = P × [r(1+r)^n] ÷ [(1+r)^n − 1], where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments. For a $200,000 mortgage at 6.5% for 30 years: r = 0.065/12 = 0.00542, n = 360, giving M = $1,264.14 per month.

Over the full 30-year term, you'd pay $455,089 total — meaning $255,089 goes to interest alone. That's more than the original loan amount. This is why shorter loan terms, while having higher monthly payments, save substantially on total interest.

15-Year vs. 30-Year Mortgage

On a $300,000 mortgage at 6.5%: a 30-year term costs $1,896/month ($382,633 in interest), while a 15-year term costs $2,613/month ($170,353 in interest). The 15-year option saves $212,280 in interest but requires $717 more per month.

Choose a 30-year term if you need lower monthly payments for cash flow, plan to invest the difference at a higher return, or want flexibility. Choose a 15-year term if you can comfortably afford the higher payment, want to build equity faster, and want to minimize total interest paid.

How Extra Payments Save You Money

Making extra payments directly reduces your principal balance, which means less interest accrues in future months. Even small extra payments can have a dramatic impact over time.

On a $200,000 mortgage at 6.5% for 30 years, adding just $100/month to your payment saves $51,427 in interest and pays off the loan 5 years early. Adding $200/month saves $87,937 and cuts the term by 8 years. When making extra payments, specify that the additional amount should go toward principal, not be applied to future payments.