Loan Calculator
Calculate monthly payments for any loan including auto, personal, student, or mortgage. Find the maximum loan you can afford given a target monthly payment, or calculate exactly how long a loan will take to pay off.
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How It Works
The amortization formula calculates equal payments that cover interest plus principal each month. Early payments are mostly interest. Later payments are mostly principal. This is the formula used for mortgages, auto loans, and personal loans.
M = P x r(1+r)^n / [(1+r)^n - 1]$25K loan, 6.5%, 60 months = $488 per monthRearrange the payment formula to solve for principal: max loan = PMT x [(1+r)^n - 1] / [r(1+r)^n]. Enter your maximum monthly budget to find the largest responsible loan amount.
Max loan = PMT x [(1+r)^n - 1] / [r(1+r)^n]$450/mo budget, 6.5%, 60 months = max loan $23,128Given loan amount and monthly payment, solve for months: n = -log(1 - P x r / PMT) / log(1+r). This tells you exactly when the loan is paid off and how much total interest you will pay.
n = -log(1 - Pr/PMT) / log(1+r)$25K at 6.5%, $350/mo = 92 months or 7.7 yearsTotal interest = (monthly payment x number of payments) minus loan amount. This number reveals how much extra you pay beyond the principal — the real price of the loan. Compare this across options, not just monthly payments.
Total interest = PMT x n - P$25K, 6.5%, 60 months = $4,279 total interest costAuto loans typically run 36 to 84 months at 5% to 10% APR depending on credit and lender. Shorter terms cost less total. Avoid extending the term just to lower monthly payments as this can leave you owing more than the vehicle is worth.
Standard 48 to 72 month terms$30K car, 7%, 60 months = $594/mo, $5,640 total interestFederal student loans have fixed rates with standard 10-year repayment. Income-driven plans lower payments but increase total interest significantly. Always exhaust federal loan options before considering private lenders.
Compare 10-year vs 20-year total cost$40K at 5.5%, 10yr = $433/mo, $11,960 total interestQuick Reference
Common examples — verify instantly above.
Auto Loan
$30K, 7%, 60 months
$594/mo
Personal Loan
$15K, 10.5%, 36 months
$487/mo
Student Loan
$40K, 5.5%, 120 months
$433/mo
Mortgage
$320K, 6.5%, 360 months
$2,023/mo
Max loan
$500/mo, 6.5%, 60 months
$25,572 loan
Total interest
$25K, 6.5%, 60 months
$4,279
Term calc
$25K, 6.5%, $350/mo
92 months
36 vs 60 months
$20K, 6% rate
Pay $111 more/mo, save $386
Tips & Shortcuts
Get pre-approved before shopping for a car or home — you will know your actual rate and can negotiate as a cash buyer.
Always compare the total interest paid across loan options, not just the monthly payment — a lower payment can cost thousands more overall.
Making one extra payment per year reduces the loan length and saves significant interest with no long-term commitment required.
Round up your monthly payment to the nearest $50 or $100 — that extra amount goes entirely toward principal and compounds significantly over time.
Refinancing makes sense when rates drop significantly (usually at least 1% lower) and you plan to stay in the loan long enough to recoup any fees.
Personal loan rates of 8% to 36% are much higher than auto or mortgage rates. Use personal loans for short-term needs only and pay them off aggressively.
Common Mistakes to Avoid
Comparing only monthly payments across loan options
A $50 lower monthly payment extended over 12 more months could cost $2,000 more in total interest. Always compare the full cost of each loan option.
Forgetting origination and other upfront fees
Many lenders charge 1% to 5% origination fees upfront. These increase the real cost of the loan significantly beyond the advertised interest rate.
Borrowing the maximum amount a lender approves
Lender approval is based on maximum risk tolerance, not on what is comfortable for your budget. Only borrow what you genuinely need and can repay without financial strain.
Ignoring prepayment penalties in the loan terms
Some loans charge fees for paying off early. Read all terms carefully before making extra payments or refinancing to a better-rate loan.
Accepting the first loan offer without shopping
Loan rates vary widely between lenders for the same borrower profile. Shopping at least 3 lenders can save hundreds or thousands of dollars in interest.
Extending loan term just to lower monthly payments
A longer term on an auto loan can leave you underwater, meaning you owe more than the vehicle is worth, which creates problems if you need to sell or the car is totaled.
Frequently Asked Questions
Monthly payment = P x r(1+r)^n / [(1+r)^n - 1], where P is principal, r is the monthly interest rate (annual rate divided by 12), and n is total number of payments. This formula produces equal payments throughout the loan life.
The interest rate is the base cost of borrowing. APR (Annual Percentage Rate) includes the interest rate plus lender fees such as origination fees and closing costs. APR gives a more complete picture of the true loan cost and is the right number to compare across lenders.
Extra payments go directly toward principal, reducing your balance faster. You pay less total interest and become debt-free sooner. Even small consistent extra payments have a large compounding impact over the life of the loan.
Amortization is paying off a loan in equal installments over time. Each payment covers the monthly interest on the remaining balance with the rest reducing principal. Early payments are mostly interest while later payments are mostly principal. This is why extra payments early save the most.
A shorter term means higher monthly payments but significantly less total interest. A longer term lowers monthly payments but you pay much more interest overall. Always compare the total cost of the loan, not just the monthly payment amount.
Credit scores of 720 and above typically qualify for the best available rates. Scores from 670 to 719 qualify for good rates. Below 670 you will face higher rates and fewer lender options. A single percentage point difference in rate can cost thousands over a loan lifetime.
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