In short: A loan calculator uses the amortization formula M = P × r(1+r)ⁿ ÷ ((1+r)ⁿ − 1) to find the fixed monthly payment, total interest and payoff schedule of a loan.
About Loan Calculator
Before you sign for a mortgage, car loan or personal loan, it is worth knowing three numbers: the monthly payment, the total interest you will pay over the life of the loan, and how quickly the balance falls. This calculator uses the standard amortization formula for fixed-rate loans with monthly payments, the same method banks use.
Add an optional extra monthly payment to see how much interest and time you save by overpaying. The yearly schedule shows how early payments are mostly interest and later ones mostly principal — which is why overpaying early has the biggest effect.
How to use Loan Calculator
- Enter the amount you will borrow, the annual interest rate and the term in years.
- Optionally add an extra monthly payment.
- Read the monthly payment, total interest and payoff time.
- Open the schedule to see principal, interest and balance for each year.
Examples
250,000 at 6.5% for 30 years gives a monthly payment of about 1,580 and roughly 319,000 in total interest.
Adding 200 per month to the same loan pays it off several years early and saves tens of thousands in interest.
Frequently asked questions
What formula does this use?
M = P × r(1+r)n / ((1+r)n − 1), where P is the principal, r the monthly rate (annual rate ÷ 12) and n the number of monthly payments.
Is APR the same as the interest rate?
Not quite. APR includes certain fees, so it is usually a little higher than the nominal rate. For comparing the payment itself, use the nominal interest rate.
Does it include property tax or insurance?
No. It covers principal and interest only. Mortgage escrow costs vary widely by location.
What about a 0% loan?
With a 0% rate, the payment is simply the loan amount divided by the number of months.
Updated November 2026 · Free, no signup · How we build and test tools