🏦 Loan Payment Calculator

Your monthly payment is the fixed amount you pay each month to repay a loan within a set term. Outside the US it is often called an EMI (equated monthly installment). This loan payment calculator works for any fully amortizing loan: mortgages, auto loans, personal loans, and student loans. Enter the principal (how much you're borrowing), the annual interest rate, and the loan term, and the calculator instantly shows your monthly payment, total interest, and the full year-by-year amortization schedule.

The amortization schedule is the key output that most loan calculators leave out. It shows exactly how much of each payment goes toward principal versus interest at every stage of the loan, which explains why paying a little extra early in the loan saves a disproportionate amount of total interest.

The standard amortization formula calculates a fixed monthly payment such that equal payments over n months exactly repay the principal plus all accumulated interest:

M = P × r × (1 + r)ⁿ / ((1 + r)ⁿ − 1)

• P: principal (the loan amount)
• r: monthly interest rate (annual rate ÷ 12)
• n: total number of monthly payments (years × 12)

Worked example (calculator defaults): $250,000 loan at 6.5% annual interest for 30 years.

• Monthly rate r = 6.5% ÷ 12 = 0.5417%
• n = 30 × 12 = 360 payments
• M = 250,000 × 0.005417 × (1.005417)³⁶⁰ / ((1.005417)³⁶⁰ − 1) ≈ $1,580 per month
• Total paid over 30 years: $1,580.17 × 360 = $568,861
• Total interest: $568,861 − $250,000 = $318,861

You pay back your $250,000 principal plus $318,861 in interest; the lender receives $568,861 in total. That interest figure is why understanding the full cost of a loan before signing matters.

On a fully amortizing loan, each monthly payment covers both interest and principal, but the proportion shifts over time. In the early months, interest dominates because the outstanding balance is high. As the balance falls, less interest accrues each month, so more of the fixed payment reduces principal.

On the $250,000 / 6.5% / 30-year example above:

• Month 1: $1,354 interest + $226 principal
• Month 60 (year 5): $1,269 interest + $311 principal
• Month 180 (year 15): $986 interest + $594 principal
• Month 300 (year 25): $444 interest + $1,137 principal
• Month 360 (final): ~$9 interest + ~$1,571 principal

This is why extra payments made early in a loan term save the most interest: every extra dollar paid against principal immediately reduces the balance on which future interest is calculated. Adding $200 per month to the mortgage above, starting from month 1, saves approximately $97,600 in total interest and cuts about 8 years off the loan term.

The yearly amortization table in the calculator shows principal paid, interest paid, and remaining balance for every year of the loan, so you can see exactly how the payoff curve works for any combination of inputs.

The loan type presets in this calculator reflect commonly used defaults; actual rates depend on your credit score, lender, and market conditions at the time you borrow. The ranges below are approximate. The mortgage and federal student loan figures were checked in October 2026.

• Mortgage (30-year fixed): 6.5 to 7.5% (Freddie Mac's weekly average was 7.40% on October 8, 2026). Long term minimizes the monthly payment but maximizes total interest paid. A 15-year mortgage typically carries a rate 0.5 to 0.75 percentage points lower and costs roughly half as much in total interest, at the expense of a higher monthly payment.
• Auto loan (5 years): 5 to 8% for new vehicles, 7 to 12% for used. Shorter terms mean higher monthly payments but far less interest. Cars depreciate quickly; a 7-year auto loan is generally inadvisable because the loan balance often exceeds the car's value for several years.
• Personal loan (3 years): 8 to 20%+. Unsecured, so rates reflect credit risk. Used for debt consolidation, home improvement, or large purchases. Always compare the total interest cost against alternatives (0% credit card introductory offer, HELOC).
• Student loan (10 years): Federal rates for loans first disbursed from July 2026 through June 2027 are 6.52% (undergraduate) and 8.07% (graduate). Private loans vary widely. Income-driven repayment plans can change the effective monthly payment but do not change the amortization math; any unpaid interest may capitalize.

For current mortgage rate guidance, see the CFPB Owning a Home resources.

How is a monthly loan payment calculated?

The monthly payment on a fully amortizing loan is calculated with the formula: M = P × r × (1 + r)ⁿ / ((1 + r)ⁿ − 1), where M is the monthly payment, P is the principal, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments. The formula solves for a fixed payment that, when made every month for n months, exactly reduces the balance to zero, covering all interest charges along the way. This calculator uses this formula for all loan types.

What is the difference between interest rate and APR?

The interest rate is the cost of borrowing the principal, expressed as an annual percentage. The APR (Annual Percentage Rate) is a broader measure that includes the interest rate plus most fees (origination fees, mortgage insurance, discount points) expressed as a single annualized percentage. APR is almost always higher than the stated interest rate. This calculator uses the interest rate, not APR. To compare the true cost of loan offers from different lenders, always compare APRs rather than interest rates, since a lower interest rate with high fees can cost more in total than a slightly higher rate with minimal fees.

How does the loan term affect my payment and total interest?

Extending the term lowers the monthly payment but increases total interest paid. Shortening the term raises the monthly payment but significantly reduces the total interest. On a $250,000 loan at 6.5%: a 15-year term gives a monthly payment of ~$2,178 and total interest of ~$142,000, compared to ~$1,580 per month and ~$319,000 total interest on a 30-year term. The 30-year loan costs about $177,000 more in interest for the convenience of a smaller monthly payment. Use the calculator to find the term that balances affordability with total cost.

Does making extra principal payments reduce total interest?

Yes, and the effect is significant. Any extra amount paid beyond the required payment reduces the outstanding principal immediately, which reduces the interest charged in every subsequent month. Extra payments made early in the loan term have the largest impact because interest is front-loaded. On a 30-year $250,000 mortgage at 6.5%, an extra $200 per month from the start saves approximately $97,600 in total interest and shortens the loan by about 8 years. The amortization table in this calculator shows your balance year by year; compare scenarios by adjusting the loan amount or term to approximate the effect of extra payments.

What is a good debt-to-income ratio for a loan?

Lenders use the debt-to-income (DTI) ratio, your total monthly debt payments divided by gross monthly income, to assess borrowing capacity. For mortgages, most lenders prefer a DTI of 36% or below, though loans can be approved up to 43 to 50% DTI with compensating factors. The front-end ratio (housing payment only ÷ gross income) should typically stay below 28%. A DTI above these thresholds doesn't necessarily disqualify you, but it usually means higher rates, stricter terms, or a requirement for private mortgage insurance (PMI). Use this calculator to find the monthly payment for different loan amounts, then check that payment against your income to estimate your DTI before applying.