How to use this calculator
This calculator works for any loan with a fixed rate and equal monthly payments, such as a personal loan. You need three numbers.
- Loan amount. The sum you borrow. This is also called the principal.
- Interest rate. The yearly rate the lender charges, as a percentage.
- Term. How many years you have to repay the loan.
The calculator then shows:
- Monthly payment. The fixed amount due each month.
- Total interest. The cost of borrowing over the whole term.
- Total repaid. The loan amount plus total interest.
- Principal vs interest bar. A quick view of how much of the total goes to each.
- Yearly schedule. The interest paid, principal paid and balance left at the end of each year.
Worked example
These are the starting values in the calculator above and the results they give. Change any input to see your own numbers.
- Loan amount
- $25,000
- Interest rate
- 8%
- Loan term
- 5 years
- Monthly payment
- $506.91
- Total interest
- $5,415
- Total repaid
- $30,415
- Interest as share of loan
- 21.7%
How a loan payment is calculated
The calculator uses the standard formula for an amortizing loan. An amortizing loan is one you repay in equal payments that cover both interest and principal, so the balance reaches zero at the end of the term.
The yearly rate is divided by 12 to get a monthly rate. Each month, the lender charges that rate on the balance still owed. The payment covers the interest first. Whatever is left reduces the balance. Because the balance keeps falling, the interest part shrinks each month and the principal part grows, even though the payment itself never changes.
Total repaid is the monthly payment times the number of payments. Total interest is total repaid minus the loan amount. For a step-by-step explanation, read how amortization works.
M = P × r × (1 + r)^n ÷ ((1 + r)^n − 1)- M
- monthly payment
- P
- loan amount
- r
- monthly interest rate (yearly rate ÷ 12)
- n
- number of monthly payments (years × 12)
How to read the results
The monthly payment tells you whether the loan fits your budget. Total interest tells you what the loan really costs. The two often pull in opposite directions.
- A longer term lowers the monthly payment but increases total interest, because you owe money for more months.
- A shorter term raises the monthly payment but cuts total interest.
- A lower rate reduces both.
- A smaller loan reduces both in direct proportion. Borrow half as much and the payment and interest are half as large.
The results do not include fees. If your loan has an origination fee or other upfront charges, the APR calculator shows the true yearly cost with fees included. If you plan to pay more than the minimum, the loan payoff calculator shows how much time and interest you save.
Frequently asked questions
How do I calculate a monthly loan payment?
You need the loan amount, the yearly interest rate and the term. Divide the rate by 12 to get the monthly rate and multiply the years by 12 to get the number of payments. Then apply the amortization formula shown on this page. The calculator does this for you and also shows the total interest and total repaid.
What is the difference between principal and interest?
Principal is the money you borrowed. Interest is the fee the lender charges for letting you use it. Every monthly payment covers that month's interest first, and the rest reduces the principal. Over the life of the loan you repay all of the principal plus the total interest. The bar in the results shows the split between the two.
Does a longer loan term cost more?
Yes, in total. A longer term spreads the loan over more payments, so each payment is smaller. But you owe money for longer, so interest is charged for more months and the total interest is higher. A shorter term costs more each month and less overall. Compare two terms in the calculator to see the difference.
Can I use this calculator for any type of loan?
It works for any loan with a fixed interest rate and equal monthly payments. That covers most personal loans and many other installment loans. It does not fit loans with changing rates, interest-only periods or a large final payment. For home loans with tax and insurance, or car loans with trade-ins, use the dedicated calculators on this site.
Why is the total repaid higher than the amount I borrowed?
The difference is interest. Each month the lender charges interest on the balance you still owe, and those charges add up over the term. The higher the rate and the longer the term, the bigger the gap between what you borrow and what you repay. Total repaid equals the loan amount plus total interest.
This calculator gives estimates for education only. It does not know your full situation and is not financial advice. Reviewed and updated November 15, 2026.