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Loan Calculator

Calculate monthly payments, total interest, and amortization schedule

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Loan Calculator Guide: Calculate Monthly Payments, Interest & Amortization Schedules

A loan calculator computes monthly payment, total interest, and a full amortization schedule from loan amount, APR, and term. It lets you test extra payments and compare terms before you commit.

What is Loan Calculator?

The loan calculator models fixed-rate installment loans (auto, personal, student). It shows how payment size, term, and APR change lifetime interest and time to payoff.

How to Use the Loan Calculator

  1. Enter principal (P), APR, and term in months or years.
  2. Calculate monthly payment and total interest.
  3. View the amortization schedule (interest vs principal each month).
  4. Add extra payments to see interest saved and earlier payoff.
  5. Compare terms (e.g., 36 vs 60 months) and rates.

Formulas & Methods

  • Monthly rate: r = APR / 12 (decimal).
  • Payment: PMT = P*r / (1 - (1 + r)^(-n))
  • Balance after k payments: B_k = P*(1 + r)^k - PMT*((1 + r)^k - 1)/r
  • Total interest: PMT*n - P

Assumptions & limitations

  • Fixed rate and level payments; variable-rate loans differ.
  • Fees/points included in P if financed; late fees not modeled.
  • Prepayment penalties may apply—check your contract.

Examples

Example A — Standard loan
P = $18,000, APR = 7%, n = 48.
r = 0.07/12 ~ 0.005833.
PMT ~ 18,000*0.005833 / (1 - (1.005833)^(-48)) ~ $432.
Total interest ~ $2,750.

Example B — Extra $50/mo
Same loan with +$50 monthly shortens payoff and saves hundreds in interest—see schedule for exact figures.

| Scenario | Payment | Interest | |---|---:|---:| | 48 mo @ 7% | ~$432 | ~$2,750 | | 36 mo @ 6.5% | higher | much less |

Pro Tips & Best Practices

  • Choose the shortest term you can afford for lower total interest.
  • Improve credit profile to seek a lower APR.
  • Avoid rolling ancillary add-ons into the loan unless necessary.
  • Set up auto-pay to avoid late fees and rate hikes.

Related Calculators

FAQ

Q: How is a loan payment calculated?

A: Payment = P*r / (1 - (1 + r)^(-n)), where P is principal, r is monthly rate (APR/12), n months.

Q: What is an amortization schedule?

A: A table showing each payment split into interest and principal and the remaining balance over time.

Q: Can I include extra payments?

A: Yes—extra monthly or one-off payments reduce interest and shorten payoff time.

Q: How do points and fees affect the loan?

A: If financed, they increase principal and interest costs; paying up front lowers total cost.

Q: What term should I choose?

A: Shorter terms cost less interest but raise payments; pick the shortest term you can afford comfortably.

Compliance note: This article is for information only and not financial advice.

Call to Action

Enter your loan amount, APR, and term—then test extra payments to see how much interest you can save.