Loan Calculator

Whether you're considering a personal loan, an auto loan, or any other fixed-rate installment loan, the questions are usually the same: what will the monthly payment actually be, and how much will the loan cost in total once every payment is added up? This calculator answers both from three simple inputs — the loan amount, the annual interest rate, and the term in years.

It assumes a fixed interest rate and equal monthly payments for the full term, the standard structure for most personal and auto loans. Each payment is split between interest and principal, with the interest portion shrinking and the principal portion growing as the loan is paid down — the total interest figure shown here is the sum of every interest portion across the full schedule.

This is an estimate, not a loan offer or financial advice. It doesn't include origination fees, insurance, or other charges a lender may add, and it assumes a fixed rate for the entire term — a variable-rate loan can change your actual payment over time. The rate you're offered depends on factors like credit score and lender policy, so use this number as a starting point for comparing offers, not as a guaranteed figure.

A worked example

Say you borrow $20,000 at a 6% annual rate for a 5-year term. The monthly rate is 6% ÷ 12 = 0.5%, and the number of payments is 5 × 12 = 60. Plugging those into the formula gives a monthly payment of $386.66. Over 60 payments, that's $23,199.60 paid in total — $3,199.60 of which is interest, the rest recovering the original $20,000 principal.

A common misconception: interest rate vs. APR

The number typed into this calculator is the interest rate, not necessarily the number you'll see advertised as APR (Annual Percentage Rate). The CFPB draws the distinction directly: the interest rate is the cost of borrowing the money itself, while APR is the interest rate plus certain additional lender fees — origination charges, for instance — rolled into a single annualized figure. Because of those added fees, APR is always equal to or higher than the interest rate, and lenders are required by the Truth in Lending Act to disclose both, precisely so borrowers can compare loans on equal footing. If you're comparing this calculator's output to a real offer, make sure you're entering the interest rate, not the APR, or the payment shown will run a little low.

Where the standard formula falls short

Term length changes more than just the monthly number. Run the same $20,000 at 6% across a 3-year, 5-year, and 7-year term: the monthly payment drops from $608.44 to $386.66 to $292.17 as the term lengthens, but total interest paid climbs from $1,903.84 to $3,199.60 to $4,542.28 over the same set of terms. A lower payment isn't automatically the better deal — it usually means paying more in total for stretching the same debt over more months. This calculator also can't model a variable-rate loan, where the rate itself changes partway through the term, or extra payments toward principal, both of which would shift the real total away from what a fixed, no-extra-payments schedule shows here.

Using the result to compare offers

Treat the monthly payment and total interest figures as a baseline for comparing loan offers apples-to-apples, not as a guarantee of what any specific lender will approve you for. Run the same amount and term at a few different candidate rates to see how sensitive the payment is to the rate you're actually offered — even a percentage point or two makes a real difference at this scale, as the worked example above shows. Once you have real offers in hand, compare their APRs side by side rather than just their advertised rates, since APR already bakes in the fee differences between lenders.

Loan payment vs. total cost of borrowing

The monthly payment answers "can I afford this each month"; total interest answers a different question — "what does this debt actually cost me." A loan with a smaller monthly payment can still be the more expensive choice once every payment is added up, exactly as the term-length comparison above shows. Both numbers matter, but for different reasons: budget around the monthly payment, and weigh the total cost of the loan — principal plus total interest — before deciding between two competing offers with different terms.