Loan Calculator

What this calculator does

This calculator computes the fixed monthly payment for an installment loan using the standard amortization formula. It also shows the total interest cost over the life of the loan and produces a year-by-year amortization schedule revealing how each payment is split between interest and principal repayment.

Formula

The monthly payment for a fixed-rate loan is:

• M — monthly payment
• P — loan amount (principal)
• r — monthly interest rate (annual rate ÷ 12 ÷ 100)
• n — total number of monthly payments (term in months)

When the interest rate is 0%, the formula simplifies to M = P ÷ n, avoiding division by zero.

How to use it

1. Enter the loan amount — the total principal you are borrowing.
2. Enter the annual interest rate as a percentage (e.g. 6.5 for 6.5%).
3. Enter the loan term and select whether it is in years or months.
4. Click Calculate to see your monthly payment, total interest, total payment, and year-by-year amortization schedule.

Example

A $10,000 personal loan at 6% annual interest over 3 years (36 months):

• Monthly rate: 6% ÷ 12 = 0.5%
• Monthly payment: $304.22
• Total payment: $304.22 × 36 = $10,951.86
• Total interest: $10,951.86 − $10,000 = $951.86

What the result means

The monthly payment is the fixed amount due each month for the life of the loan. Early payments are weighted heavily toward interest — over time, a larger share of each payment goes toward principal. The total interest shows the full cost of borrowing: a shorter term or lower rate significantly reduces this figure. The amortization schedule shows exactly how the balance shrinks year by year.

Assumptions and limitations

• This calculator uses a fixed-rate formula. Variable-rate loans have payments that change as rates adjust.
• Fees are not included. Origination fees, prepayment penalties, and other lender charges are not reflected in the monthly payment estimate.
• Payments are assumed to be made monthly on a fixed schedule with no extra payments.
• Results are estimates for planning purposes only. Consult your lender for exact terms and an official payment schedule.