Loan calculator
Amount, rate, term. Get the monthly payment, the total interest over the life of the loan, and what an extra monthly payment saves.
Reading your result like a lender does
The monthly payment is the least informative number on the page. Lenders and finance-savvy borrowers look at total interest, because that is the actual price of the loan. A $20,000 loan at 7% costs $3,761 over five years but $7,866 over ten: same money borrowed, double the price, in exchange for a payment that feels $164 lighter each month.
Two levers move total interest, and they are not equal:
- Term is the big one. Shortening a 10-year loan to 5 years cuts interest roughly in half. If the shorter payment fits your budget, it is the single best deal in consumer finance.
- Rate matters more as balances grow. One percentage point on $20,000 over 5 years is about $570; on a $300,000 mortgage over 30 years it is about $74,000. Shop rates hard on big loans, less obsessively on small ones.
The extra-payment field above shows the third lever: prepayment. Every extra dollar retires principal immediately, deleting all future interest that dollar would have generated. On long loans, modest extra payments early beat large ones late, because early dollars have more future interest to delete.
Frequently asked questions
How is the monthly loan payment calculated?
With the standard amortization formula: payment = P x r / (1 - (1 + r)^-n), where P is the amount borrowed, r the monthly rate (APR / 12), and n the number of monthly payments. A $20,000 loan at 7% APR over 5 years comes to $396.02 a month.
Why is total interest so high on long loans?
Early payments are mostly interest because the balance is still large. Stretching the same amount over more years lowers the monthly payment but multiplies the months you pay interest on a slowly-shrinking balance.
How much do extra payments actually help?
Every extra dollar goes straight to principal, which removes all the future interest that dollar would have accrued. Enter an extra monthly amount to see months cut and interest saved on your exact loan.
Is APR the same as interest rate?
APR includes mandatory fees rolled into the yearly cost, so it is the honest comparison number. This calculator treats your input as the yearly rate compounded monthly, which matches how lenders quote most consumer loans.