Loan calculator
Find the monthly payment, total interest and full repayment schedule for any fixed-rate loan - car, personal, student or business.
Nominal annual rate.
Monthly payment
$500.95
60 payments over 5.0 years.
- Principal
- $25,000.00
- Total interest
- $5,056.92
- Total repaid
- $30,056.92
Interest is 16.8% of everything you repay.
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How instalment loans work
Car loans, personal loans and most student loans are amortising - you make identical payments on a fixed schedule and the balance reaches exactly zero on the final one. The payment comes from:
M = P × [ r(1 + r)ⁿ ] / [ (1 + r)ⁿ − 1 ]with P the amount borrowed, r the monthly rate (annual ÷ 12) and n the number of payments.
The split between interest and principal shifts over time. Interest each month is simply the balance multiplied by the monthly rate, so as the balance falls the interest falls with it and more of your fixed payment attacks the principal.
A worked example
$25,000 borrowed at 7.5% over 5 years:
- Monthly payment: $500.95
- Total interest: $5,056.92
- Total repaid: $30,056.92
- Interest as a share of repayments: 16.8%
The first payment is $156.25 interest and $344.70 principal. By payment 30 the split is $87.99 interest and $412.96 principal, and the final payment is almost entirely principal.
Term length changes everything
The same $25,000 at 7.5%:
| Term | Monthly payment | Total interest |
|---|---|---|
| 3 years | $777.66 | $2,996 |
| 5 years | $500.95 | $5,057 |
| 7 years | $383.46 | $7,210 |
| 10 years | $296.75 | $10,611 |
Stretching from 3 to 10 years cuts the monthly payment by 62% and raises the interest bill by 254%. This is the single most consequential choice in the whole application, and it is the one lenders are most willing to move on - because a longer term earns them more.
What to check before you sign
Is the rate fixed? A variable rate can reset. Everything here assumes it does not.
Are there fees rolled into the balance? Origination fees of 1–8% are common on personal loans and are often deducted from the money you receive rather than added to the balance. If you need $25,000 in hand with a 5% origination fee, you must borrow $26,316.
Is there a prepayment penalty? If so, the extra-payment strategy above may not pay off. Federal rules restrict them on mortgages; personal and auto loans are less protected.
Is it a simple-interest loan or does it use the Rule of 78s? The Rule of 78s front-loads interest so early payoff saves far less than it should. It is banned on loans over 61 months in the US and prohibited outright in some states, but it still surfaces in subprime auto finance.
Reading the payment schedule
The schedule in this calculator lists every payment individually rather than annual summaries, because for shorter loans the month-to-month detail is what matters. Two useful reference points: the payment where principal first exceeds interest, and the total interest figure. If that total makes you uncomfortable, the fix is a shorter term or a larger deposit - not a lower payment.
Common questions
What is the difference between the interest rate and the APR?
The interest rate is what accrues on the outstanding balance. The APR additionally includes origination fees, arrangement fees and other mandatory charges, expressed as a yearly rate. Two loans can share a 7% interest rate while one has a 7% APR and the other 9.4%. Compare offers on APR, but enter the interest rate here.
Does paying extra actually save money?
On almost every fixed-rate instalment loan, yes. Interest is charged on the balance you still owe, so anything extra goes straight against principal and removes all the future interest that balance would have generated. Check your agreement for prepayment penalties first - they are rare on personal loans but still appear on some auto finance.
Why does my first payment barely reduce the balance?
Because interest is charged first. On a $25,000 loan at 7.5%, the first payment includes $156 of interest. Early in a loan the balance is at its largest, so the interest slice is at its largest too. The principal share grows with every payment.
What loan term should I choose?
A longer term lowers the monthly payment and raises the total cost. The same $25,000 at 7.5% costs about $5,057 in interest over 5 years and $10,611 over 10. Choose the shortest term whose payment you can meet comfortably, since a missed payment is far more expensive than the extra interest.
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