Loan Payment Calculator
Calculate your monthly loan payment, total interest cost, and see how extra payments can help you pay off your loan faster. Works for mortgages, auto loans, personal loans, and student loans.
Payment Breakdown
First Year Amortization
Loan Summary
Interest Ratio
Interest as percentage of total cost
What is a Loan Payment Calculator?
A loan payment calculator determines your monthly payment amount, total interest cost, and payoff timeline for any type of loan. Whether you're financing a home, car, or consolidating debt, this tool uses the standard amortization formula to show exactly what you'll pay each month and over the life of the loan. Understanding these numbers before borrowing helps you make informed decisions and budget effectively.
According to the Consumer Financial Protection Bureau (CFPB), understanding your loan terms before signing is essential for avoiding payment shock and managing debt responsibly. This calculator works for mortgages, auto loans, personal loans, student loans, and any other installment loan with fixed payments. For specific loan types, you may also find our mortgage calculator or auto loan calculator helpful.
How is the Monthly Loan Payment Calculated?
The monthly payment formula for an amortized loan is: M = P × [r(1 + r)^n] / [(1 + r)^n - 1], where M is the monthly payment, P is the principal (loan amount), r is the monthly interest rate (annual rate divided by 12), and n is the total number of payments. This formula ensures equal monthly payments throughout the loan term while gradually shifting the payment composition from mostly interest to mostly principal.
Example Calculation: $200,000 Mortgage at 6.5% for 30 Years
For a $200,000 mortgage at 6.5% annual interest over 30 years: the monthly rate is 0.065 ÷ 12 = 0.00542, and the number of payments is 30 × 12 = 360. Plugging these into the formula gives a monthly payment of $1,264.14. Over 30 years, you'll pay $455,089 total, which includes $255,089 in interest - more than the original loan amount.
Loan Payment Comparison by Term Length
The loan term significantly impacts both your monthly payment and total interest paid. Shorter terms have higher monthly payments but save substantial money on interest. Here's how different terms compare for a $200,000 loan at 6.5% interest:
| Loan Term | Monthly Payment | Total Interest | Total Cost |
|---|---|---|---|
| 10 Years | $2,271 | $72,520 | $272,520 |
| 15 Years | $1,742 | $113,560 | $313,560 |
| 20 Years | $1,491 | $157,840 | $357,840 |
| 30 Years | $1,264 | $255,089 | $455,089 |
As the table shows, a 15-year term saves $141,529 in interest compared to a 30-year term, but requires $478 more per month. Choose the term that balances affordable monthly payments with your long-term financial goals.
How Extra Payments Reduce Your Loan Cost
Making extra payments toward your principal can dramatically reduce both the loan term and total interest. Even small additional amounts compound into significant savings because they reduce the balance on which future interest is calculated. For example, adding just $100 extra to a $200,000 30-year mortgage at 6.5% saves $44,168 in interest and pays off the loan 4 years and 7 months early.
The key is that extra payments go directly to principal reduction, not interest. This creates a snowball effect: as principal decreases faster, less interest accrues each month, and more of your regular payment goes toward principal too. Use this calculator's extra payment feature to see exactly how much time and money you can save.
Amortization: Early vs. Late Payments
In an amortized loan, early payments are mostly interest while later payments are mostly principal. On a $200,000 30-year mortgage at 6.5%, your first payment of $1,264 includes $1,083 in interest and only $181 toward principal. By year 15, the split is roughly equal. By year 25, only $400 goes to interest while $864 reduces principal. This is why making extra payments early in the loan term saves the most money.
Types of Loans and Their Payment Structures
Mortgage Loans (15-30 Years)
Home loans typically have the longest terms and lowest interest rates due to property collateral. Fixed-rate mortgages keep the same payment for the entire term, while adjustable-rate mortgages (ARMs) start lower but can change. Most mortgages include escrow payments for property taxes and insurance, adding to your monthly obligation beyond principal and interest.
Auto Loans (3-7 Years)
Car loans have shorter terms and higher interest rates than mortgages. Longer auto loan terms (72-84 months) reduce monthly payments but increase total cost and may leave you "underwater" (owing more than the car is worth). Financial experts recommend terms of 48-60 months maximum for most buyers.
Personal Loans (1-7 Years)
Unsecured personal loans carry higher interest rates because they're not backed by collateral. They're commonly used for debt consolidation, home improvements, or major expenses. Fixed monthly payments make budgeting straightforward, and there are typically no prepayment penalties. For comparing loan options, try our interest calculator to understand different rate scenarios.
Last Updated: January 2026 | This calculator provides estimates for educational purposes. Actual loan terms, rates, and payments depend on your credit profile, lender policies, and current market conditions. Consult with a financial advisor or lender for personalized loan guidance.