Loan Calculator
How It Works
A loan calculator estimates your monthly payment and total cost for any fixed-rate installment loan — whether that's a personal loan for debt consolidation, a home improvement project, or an auto loan for your next vehicle. Enter the loan amount, interest rate, and repayment term, and the calculator instantly shows you your monthly payment, total interest paid, and full amortization schedule.
Personal loans are unsecured loans from a bank, credit union, or online lender. Because there is no collateral, lenders price risk into the interest rate — which is why your credit score plays such a large role in what rate you qualify for. Common personal loan amounts range from $1,000 to $50,000 with terms of 1 to 7 years.
Auto loans are secured by the vehicle itself, which typically means lower interest rates compared to personal loans. Our auto loan tab includes a Trade-in Value input — if you are trading in a vehicle as part of your purchase, the trade-in value reduces the effective loan amount and lowers your monthly payment accordingly.
The calculator uses the same standard amortization formula used by every major lender. This means the monthly payment you see here will match what a bank quotes you for the same inputs — making it a reliable tool for comparing loan offers before you apply. Use it to test different scenarios: How does dropping your loan term from 60 months to 48 months change your monthly payment? How much total interest do you save by putting $2,000 more down on a car?
Loan Payment Formula
Monthly loan payments are calculated using the standard amortization formula — the same formula used for mortgages, auto loans, and personal loans:
M = P × [r(1+r)^n] / [(1+r)^n − 1]
- M — Monthly payment
- P — Principal loan amount
- r — Monthly interest rate (annual rate ÷ 12 ÷ 100)
- n — Total number of monthly payments (term in years × 12)
Worked Example
Loan Amount: $15,000
Interest Rate: 7.5% / year
Loan Term: 5 years (60 months)
P = $15,000
r = 7.5 ÷ 12 ÷ 100 = 0.00625
n = 5 × 12 = 60 payments
M = $15,000 × [0.00625 × (1.00625)^60] / [(1.00625)^60 − 1]
Monthly Payment = $300.57
Total Paid = $300.57 × 60 = $18,034.20
Total Interest = $18,034.20 − $15,000 = $3,034.20
That's $3,034 paid in interest over 5 years on a $15,000 personal loan at 7.5%. Use the calculator above to run your own numbers and compare different term lengths or rates to find the most affordable option.
Frequently Asked Questions
Loan Answers at a Glance
How is loan interest calculated?
Loan interest is calculated using the standard amortization formula, which splits each fixed monthly payment between interest on the remaining balance and principal reduction. Early payments are mostly interest; later payments are mostly principal. On a $15,000 personal loan at 7.5% for 5 years, you pay $3,034 in total interest over the life of the loan.
What is a good interest rate for a personal loan?
A good personal loan rate depends on your credit score. Borrowers with excellent credit (720+) typically qualify for rates between 6% and 12%. Good credit (670–719) usually sees 12%–20%, and below 670 expect 20% or higher. Comparing offers from banks, credit unions, and online lenders is the most effective way to secure a competitive rate.
How does a shorter loan term save money?
A shorter loan term saves money because you pay interest on the outstanding balance for fewer months, dramatically reducing total interest paid. For example, a $15,000 loan at 7.5% costs $787 in interest over 3 years but $3,034 over 5 years — nearly four times as much — even though the monthly payment difference is only about $165.
How We Calculate This
This loan calculator uses the standard amortization formula — the same formula banks use to determine your fixed monthly payment on personal loans, auto loans, and other installment debt:
M = P × [r(1+r)^n] / [(1+r)^n − 1]
- P = Principal loan amount (minus trade-in value for auto loans)
- r = Monthly interest rate (annual rate ÷ 12 ÷ 100)
- n = Total number of monthly payments (term in years × 12)
- M = Fixed monthly payment amount
Total interest paid equals (M × n) − P. The calculator also generates a full amortization schedule showing the principal and interest split for every payment.
Common Use Cases
- Compare personal loan offers from multiple lenders — plug in different rates and terms to see which offer costs the least in total interest
- Calculate your monthly car payment before visiting the dealership — enter the vehicle price, trade-in value, and expected rate to know your budget in advance
- Decide between a 36-month and 60-month loan term — see the trade-off between lower monthly payments and higher total interest paid
- Plan a debt consolidation strategy — estimate whether consolidating multiple debts into a single personal loan reduces your overall monthly payment